My client uses Standard Deduction for the current tax year-2021,
but he used Itemized deduction last year-2020.
Do I have to report his State Refund he received during the tax year-2021 on schedule 1: Taxable Refund?
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actually the answer is maybe.. some of it may be taxable.. all of it may be.. or none of it.. there is a state and local tax refund worksheet in the program. if you did their 2020 return it should mostly populate for you. I am finding many of these refunds are not taxable in 2021 as there was no tax benefit on the 2020 return due to the SALT limitation.
Yes - because he deducted those taxes on the 2020 return.
so now the refund is income.
actually the answer is maybe.. some of it may be taxable.. all of it may be.. or none of it.. there is a state and local tax refund worksheet in the program. if you did their 2020 return it should mostly populate for you. I am finding many of these refunds are not taxable in 2021 as there was no tax benefit on the 2020 return due to the SALT limitation.
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