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Posted by Herb Smith on March 23, 2007, 6:31 am
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> If I applied a local tax overpayment as a credit toward the
> following tax year's local taxes, do I need to claim that
> credit as a refund for my fed income?
If your "local tax overpayment" resulted in a reduction of
your federal income tax liability, then a refund of the
overpayment (whether received in cash or as a credit) would
be considered taxable income for the year received. Not all
payments of local tax result in a tax benefit, however.
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