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Level 1
December 7, 2019
Solved

If I reach the SALT limitation with property tax should the 2018 state refund still be fully taxable in 2019?

  • December 7, 2019
  • 1 reply
  • 13 views

If you have 10,000 in property tax and 10,000 in state tax and say a 4,000 state refund the State and Local Refunds Taxable in 2019 worksheet will still say that the refund is taxable without considering the SALT limitation. Should it be not taxable since the state tax does not provide any 2018 due to the SALT limit or possibly a pro rata 50% taxable as if both were used equally or still fully taxable?

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Best answer by Accountant-Man

Maybe.

What do you think will happen if you CHOOSE to deduct sales tax on federal Sch A instead of state income taxes? Your Sch A SALT deduction will still be $10,000, you won't have deducted ANY state income taxes, and that refund will not be taxable income in 2019.

1 reply

Accountant-Man
Level 13
December 7, 2019

Maybe.

What do you think will happen if you CHOOSE to deduct sales tax on federal Sch A instead of state income taxes? Your Sch A SALT deduction will still be $10,000, you won't have deducted ANY state income taxes, and that refund will not be taxable income in 2019.

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Level 8
December 7, 2019
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