If you itemize your federal taxes and deduct state income tax paid, you will need to record any refund as income on the following year's tax return. To do so, you will need to confirm the refund amount you received from your state income tax the previous year. With a copy of last year's state return, you will be able to easily confirm the amount you requested to have refunded to you. However, it is possible that the actual refund did not match the requested refund on your tax return, such as if your state department of revenue caught any errors on your original return. To be thorough, it is best to confirm the exact amount you were actually paid.
Examine Form 1099-G for the amount you were refunded. This form is issued by your state and reports the full refund or credits you received from your state government in a single year. 1099-G is delivered the year after any refunds are paid. For instance, the form reporting your 2011 state income tax refund, which would have been paid to you in 2012, would be mailed to you in early 2013. A few states, such as New Jersey, are moving toward electronic delivery of this form.
Check your financial records. Your state tax refund may have come in the form of a check, in which case the check stub will list the correct amount. If the refund was issued through direct deposit, the exact dollar amount will appear as a credit in your bank account.
Contact your state department of revenue or equivalent department if you are unable to wait for your annual Form 1099-G, and are unable to find any financial records confirming your refund amount. You will likely need your Social Security number, filing status and address for identification purposes. Some states will allow you to complete this step online. Others will require that you call or submit your request in writing.
- Maintaining updated financial and tax records will make future recordkeeping relatively simple.
- Not all states have revenue departments, but all states with an income tax have a department that oversees income tax returns. Your state tax office, for example, may reside in a department of the treasury or in a department of taxation.
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