Report state tax refunds on Schedule 1, line 1 of Form 1040
If you received a state income tax refund in the current year and you itemized deductions on your federal return the prior year, that refund may be taxable on your federal return. You report it on Schedule 1 (Form 1040), line 1, labeled "State and local income tax refunds." The IRS needs to know about it because you claimed the state tax as a deduction before, and now you are getting money back.
The key question is whether you itemized deductions on last year's federal return. If you took the standard deduction instead, your state refund is not taxable federally, and you do not report it. The reason: you only report refunds for taxes you actually deducted. If you did not deduct the state tax, there is nothing to report.
You will receive a Form 1099-G from your state tax agency if the refund is $10 or more. This form shows the refund amount in box 1. Use this amount when you fill in Schedule 1. If you received multiple state refunds (from different states or different tax years), add them together and report the total on line 1.
Key Takeaways
- State tax refunds are reported on Schedule 1, line 1 of Form 1040, but only if you itemized deductions on your prior-year federal return.
- If you claimed the standard deduction last year, your state refund is not taxable federally and does not need to be reported.
- Your state will send you Form 1099-G for refunds of $10 or more; use the amount shown in box 1 when you file.
- The refund is taxable because you deducted the state tax payment in the prior year and are now recovering part of it.
- If you did not receive a 1099-G but got a refund, contact your state tax agency to request the form or confirm the refund amount.
When a state refund is taxable and when it is not
A state income tax refund is taxable on your federal return only if you itemized deductions on your prior-year federal return. Itemizing means you chose to deduct state and local taxes (SALT) instead of taking the standard deduction. Since you deducted the state tax payment, recovering part of it through a refund creates taxable income.
If you took the standard deduction on your prior-year return, your state refund is not taxable. The standard deduction is a flat amount you claim instead of itemizing, so you did not deduct the state tax in the first place. No deduction means no refund to report.
The year that matters is the year you paid the state tax, not the year you receive the refund. If you paid state taxes in 2023 and received the refund in 2024, you report the refund on your 2024 federal return. Your 2023 federal return determines whether it is taxable — specifically, whether you itemized on that 2023 return.
How to find your prior-year deduction status
Look at your prior-year federal tax return to see whether you itemized or took the standard deduction. If you filed Form 1040, check Schedule A. If Schedule A is attached and has numbers on it, you itemized. If Schedule A is blank or not attached, you took the standard deduction.
If you do not have a copy of your prior-year return, you can order a transcript from the IRS. Call 1-800-908-9946 or go to irs.gov and select "Get Your Tax Record" under Tools. Request a "Tax Return Transcript," which shows whether you itemized and how much you deducted for state and local taxes. The transcript arrives by mail in about two weeks, or you can view it online immediately if you set up an IRS online account.
Your tax software from the prior year may also show this information. If you used TurboTax, H&R Block, or another program, log in to your account and pull up your prior-year return. Look for the line that shows your SALT deduction or the standard deduction amount.
Filling in Schedule 1 with your refund amount
Once you confirm you itemized on your prior-year return, you need the refund amount. Your state will send you Form 1099-G if the refund is $10 or more. Box 1 of the 1099-G shows the state income tax refund. This is the number you enter on Schedule 1, line 1.
If you received refunds from more than one state, or if you received a refund for a prior tax year in addition to the current year, add all the amounts together. Report the total on line 1 of Schedule 1. The 1099-G will show each refund separately, but you combine them for the federal return.
Schedule 1 is filed with your Form 1040. If you use tax software, it will ask you about state refunds and automatically place the amount on the correct line. If you file by hand, write the amount on line 1 of Schedule 1, then attach Schedule 1 to your 1040 when you mail it in.
What to do if you did not receive a 1099-G
If your state refund was less than $10, the state is not required to send a 1099-G. You still report the refund on Schedule 1, line 1 if you itemized on your prior-year return. Use the amount shown on your state refund check, your state tax account online, or your state's refund status tool.
If your refund was $10 or more and you did not receive a 1099-G by early February, contact your state tax agency. Most states have a phone line or online portal where you can check your refund status and request a copy of the form. The state may have mailed it to an old address, or the form may still be processing. Ask the state to email or mail you a copy, or ask for the refund amount so you can report it yourself.
Keep a record of the refund amount you report, whether it came from a 1099-G or from your state's website. If the IRS later questions the amount, you will need to show proof that you received it.
Partial refunds and refunds you did not receive
If your state refunded only part of your state tax payment — for example, because you owed a penalty or had an offset — report only the amount you actually received. The 1099-G will show the net refund amount, which is what you report on Schedule 1.
If your state applied your refund to next year's estimated taxes instead of sending you money, that is still a refund and is still taxable. Report the amount that was applied, not zero. Your 1099-G will show this as well.
If you requested a refund but your state denied it or reduced it after review, you do not report a refund you did not receive. Report only what actually came to you or was credited to your account.
State refunds and the SALT deduction cap
The federal SALT deduction is capped at $10,000 per year (or $5,000 if married filing separately). This cap affects how much state tax you can deduct on your federal return, but it does not change how you report a refund. You still report the full refund amount on Schedule 1, line 1, regardless of the SALT cap.
The cap limits your deduction in the year you pay the state tax. When you receive a refund, you are reporting income in the year you receive it. These are separate calculations. A large state refund does not trigger the SALT cap; the cap only applies to the deduction side.
Frequently Asked Questions
Do I report a state refund if I took the standard deduction last year?
No. State refunds are only taxable if you itemized deductions on your prior-year federal return. If you took the standard deduction, you did not deduct the state tax, so the refund is not taxable. You do not report it on your 1040.
What if I received a refund for a tax year other than the current year?
Report it on your current-year return in the year you receive it. If you got a 2022 state refund in 2024, report it on your 2024 Form 1040. The year you paid the tax determines whether it is taxable (based on your 2022 itemization status), but you report it when the money arrives.
Can I report a state refund if I did not receive a 1099-G?
Yes, if the refund was less than $10 or if the form has not arrived yet. Use the refund amount from your state's website, your refund check, or your state tax account. If the refund was $10 or more and you still have not received the form by mid-February, contact your state tax agency to request it.
What if my state refund was offset for child support or other debt?
Report only the amount you actually received. If your state refund was $800 but $200 was offset, report $600 on Schedule 1. The 1099-G will show the net amount after offsets, which is what you use.
Do I need to attach the 1099-G to my return?
No. You report the amount on Schedule 1, but you do not attach the 1099-G to your return. Keep it with your tax records in case the IRS asks for proof. If you file electronically, the 1099-G stays in your files at home.