While it felt good receiving that state income tax refund last year, don't consider it completely "found money." Whether or not you have to claim the refund on this year's taxes depends on whether you itemized your deductions on your federal return.
If you receive Form 1099-G in the mail, referred to as "certain government payments" by the Internal Revenue Service, it shows your state refund amount from the previous year. If you deducted the state income tax you paid on your federal tax form as an itemized deduction, you'll have to include any refund amount as income on the following year's taxes.
- Comstock/Stockbyte/Getty Images
- Reasons You Won't Get Your Federal Refund
- What Determines How Much You Get Back on Your W-2 Taxes?
- Can I Fix My Tax Refund if It Was Incorrect Last Year?
- Do Married Couples Have to File Joint on State Taxes If They Filed Joint on Federal Taxes?
- How Long Do You Have to File if the Government Owes You Taxes?
- How Do I File My Taxes If I Got Married & Moved to Another State?