State Income Tax Refund

[kwthetaxguy]

Hello, 

The state income tax refund always confuses me. 

In 2022, I had $10,453 in state income taxes that was limited to $10,000 due to the SALT cap. 

I had $7,476 in interest expense and $600 in charitable contributions. 

Therefore, all in all, I had $18,076 in charitable deductions. 

This year, I received a 1099-G for $691. Is that $691 refund taxable? 

[sjrcpa]

Any real estate tax deducted?

[kwthetaxguy]

Last year? Yes, 2022 info below: 

Real Estate Taxes: $1,917

State income taxes: $8,536

Total State Taxes = $10,453

Refund listed on 2022 1099-G: $691

[Accountant-Man]

This line is wrong:

<<Therefore, all in all, I had $18,076 in charitable deductions.>>

(Maybe 18076 in itemized?)

The refund worksheet will calculate that only X% of the income taxes paid were really deducted (10000 / 10453 = 95.6%) and since 8536 /10453 was the income tax piece of the total, x 95.6% was deducted,  depending on the Std Deduction for your TP, only 81.67% X 95.6% of the $691 refund is taxable income.

I think?

[kwthetaxguy]

Yes, $18,076 in itemized; sorry - I was multi-tasking. 

[George4Tacks]

Use the resources of the program. Did you complete the State Refund Wksht?

[kwthetaxguy]

I'm actually using a different software; I just love the feedback from thsi community. 

[George4Tacks]

Then use Google to work it out.

https://apps.irs.gov/app/vita/content/globalmedia/state_and_local_refund_worksheet_4012.pdf 

[sjrcpa]

Then use the worksheet in your software.