All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Valued Pioneer
Posts: 3
Registered: ‎04-09-2016
Accepted Solution

State Refund Entered and Retained but does not appear in 1040 Line 10

[ Edited ]

I just e-filed the 2015 federal taxes for my daughter and included her state tax refund from the prior year as income.  However, when I filled out her state taxes and was asked to enter her state tax refunds (if any) entered on the federal tax return (1040, line 10), I discovered that the refund I had entered, although retained in the file, does not show on form 1040 line 10.  This appears to be a defect in the softwaare and looks like I will have to file an amended return.  Has anyone else encountered this?  Out of the approximately 20 years I've used tax filing software, this is the first time I have encountered what appears to be an error.

 

I am using H&R Block Deluxe 2015 + Efile.

 

Thank you for any help.

Tax Pro
Posts: 5,442
Registered: ‎02-23-2016

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

[ Edited ]

Hi Matt-15,

 

Welcome to the community.

 

Did you daughter itemize deductions on Schedule A last year?  The state tax refund is only taxable income if it was deducted on Schedule A the year before and it provided a tax benefit.

 

Hope this helps & please ask if you have any other questions.

Tax Pro
Posts: 1,424
Registered: ‎09-04-2014

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

State refunds wil not be taxable if you did not itemize in 2014 or if you chose to use the state sales tax instead of state withholding. 

BettyB
Sr. Tax Analyst
Valued Pioneer
Posts: 3
Registered: ‎04-09-2016

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

Hi LousH,

 

I learned something new this year, always good.  She did itemize laste year.  However, the standard deduction was higher than her itemization.  This is the first yime I"ve encountered this.  Kudos to H&R Block for this catch.

 

Thank you,

 

Matt

Valued Pioneer
Posts: 3
Registered: ‎04-09-2016

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

Hi BettyB,

 

I learned something new this year, always good.  She did itemize laste year.  However, the standard deduction was higher than her itemization.  This is the first yime I"ve encountered this situation.  I also did not know of the state sales tax angle.  Kudos to H&R Block for this catch.

 

Thank you for your help,

 

Matt

Tax Pro
Posts: 5,442
Registered: ‎02-23-2016

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

Welcome.

Pioneer
Posts: 2
Registered: ‎01-30-2017

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

Federal Taxes 2016.  I have entered a state tax refund from form 1099-G in the appropriate spot and it has been retained in the file...but does not appear on form 1040 line 10.   I did itemize deductions last year which were more then the standard deductions.   I am filing for year 2016.  I have read the instructions for line 10 and DO NOT qualify for any of the exceptions.

The amount of the state refund SHOULD appear on line 10.   Is there a problem with the 2016 software?

Also, I have looked at the form 1099-G in my filing and this is what is checked:

   Did you itemize your deductions in 2015?    YES

   Did you deduct general sales taxes in 2015?   NO

   Do you fall into any of the exceptions....  ?  YES

 

Where can I find out what "exception" I qualify for???

 

Thanks

Highlighted
Tax Pro
Posts: 1,424
Registered: ‎09-04-2014

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

[ Edited ]

Good Morning Barbara13 and welcome to the community.

You state your itemized deductions were more than your standard deduction.  Was the difference between the standard deduction and itemizing less than than the state refund?  If so, your taxable state refund would be that difference. (also what you could have used for sales tax and the difference between withholding could also affect the taxable portion) There should be a worksheet you can use in the progream to reach the answer.

I noticed too you said you met an exception.  If you had said no to that question, would it then have carried your refund to

line 10 of the 1040?  (I'm not familuar with the online software).

Just some thoughts off the top of my head.

BettyB
Sr. Tax Analyst
Pioneer
Posts: 2
Registered: ‎01-30-2017

Re: State Refund Entered and Retained but does not appear in 1040 Line 10

Thank you for replying.  The H & R Block software does not let you check or uncheck boxes on the worksheets.  It fills it in from the info you supply.   I did, however, get a worksheet from the IRS site and I do not qualify for any exceptions.  Don't know what to do at this point...guess I'll have to go to an H & R Block office.  And won't be buying this company's software next year.