Reporting federal and state tax refunds in the Fiduciary module in Lacerte

To report federal and state tax refunds:

1. Go to Screen 18, Tax Refunds.
2. Enter the State tax refund.
3. Enter the Federal income tax refund.
    
   • State tax refunds received from the prior year are to be included on line 8 of the Form 1041 and excluded from the state return. 
   • Federal Income Tax Refunds received during the tax year are considered in the determination of trust accounting income but ignored in the determination of taxable income.