Category: State and Local Income Tax Refunds

Picture of Form 1040 pages 1 and 2.

Form 1040, Line 10: When are Tax Refunds Taxable?

When completing a Form 1040, there is often confusion related to Form 1040, Line 10. When are state and local income tax refunds taxable? When are they not taxable? Prior-Year State and Local Taxes Deduction and Taxable Income Whether or not refunds of state or local taxes are taxable depends on the answers to the following questions: Whether or not...