If you received a state or local tax refund during the year, it may be taxable income depending on how you filed your return last year.
You should receive Form 1099-G, either by mail or by downloading it from your state’s tax website.
- Box 2 of the form shows the taxable refund amount.
- Whether this amount is taxable depends on whether you claimed the standard deduction or itemized deductions on your prior year’s return.
Be sure to review your previous return to determine how to report this income correctly.