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URL:  http://boards.fool.com/i-am-helping-my-daughter-do-her-taxes-no-issues-30543430.aspx

Subject:  Re: Illinois Taxes Date:  2/14/2013  10:16 PM
Author:  irasmilo Number:  117776 of 121219

I am helping my daughter do her taxes. No issues with Federal. However, for State of Illinois, she received a check for $62 from State of Illinois. Received it in March, 2012. It was her Illinois income tax refund check for 2011. My issue: where do you declare that income on 2012 Form IL 1040? Only thing I can figure is Line 3 and use Schedule M. Any and all input is appreciated. This is her second year of working and last March was her first refund check.

A state tax refund may or may not be taxable at the federal level depending on whether the original payment of the tax reduced federal taxable income.

However, a state tax refund is not reportable income on the state income tax return. How each state handles this is up to the state. Some include the federal reportable amount at the "top" of the return and then subtract it as an adjustment. Others just ignore it altogether.

Ira
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