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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: Question about refunds Date: 2/5/2003 11:52 AM
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So does that mean that in 2003, when I will itemize and deduct 2003 taxes, my 2002 refund is taxable?

What you do in 2003 has no bearing on whether your refund for 2002 state taxes is taxable. It all depends on what you did in 2002. If you deducted the tax payments on Schedule A in 2002, then the refund in 2003 is probably taxable. (You have to complete a short worksheet to determine if the refund is fully taxable. The simple answer is... if you had enough deductions to itemize without considering the state income tax deduction, the entire refund is taxable. If not, only a portion is taxable.)

I can legitimately see it both ways - it not being taxable since in 2002 I didn't itemize or it being taxable since I received it in 2003 and I am itemizing then.

As explained above, your actions in the year you receive the refund are irrelevant.

Not trying to be difficult...

Not difficult at all.

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