Reporting of state tax refund (1099-G) on Federal taxes

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Subject Author Date Reporting of state tax refund (1099-G) on Federal taxes citizen_average 04-10-2007  Re: Reporting of state tax refund (1099-G) on Fede... Phil Marti 04-12-2007  Re: Reporting of state tax refund (1099-G) on Fede... okietax 04-12-2007
Posted by citizen_average on April 10, 2007, 10:06 am Please log in for more thread options In 2006, I received a small refund from California FTB for the 2005 state income taxes. In my federal filing for 2005, I had used schedule A (itemized deductions). Therefore, normally, the state tax refund would be considered income for 2006. I have received 1099G, and normally this would be reported on line 10 of federal 1040. However, in 2005, I was subject to a huge AMT (and even huger for 2006 :(). As such, I did NOT get any benefit from a large chunk of state income tax. I followed pub 525, and basically, since I did not effectively get a benefit on my 2005 federal taxes filed in 2006, I do not have to report the amount from 1099G on my 2006 federal taxes on line 10. OK, that's good. But where and how do I explain the reason? I do not want IRS computers going bonkers -- California FTB would tell IRS computers that I was issued a 1099G, and IRS computers will not find any entry on line 10 of my 1040. So, some database comparison, and voila, I would get unwanted letters from IRS! I know this can be explained at that time, but I would rather explain it upfront. So, how do I do it? Do I leave line 10 blank, or do I enter 0.00, which might indicate that a 1099G was issued, uit includbile amount is zero? Thanks for your help and suggestions! << ======================================================= >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ======================================================= >> Posted by Phil Marti on April 12, 2007, 12:25 am Please log in for more thread options > I followed pub 525, and > basically, since I did not effectively get a benefit on my > 2005 federal taxes filed in 2006, I do not have to report > the amount from 1099G on my 2006 federal taxes on line 10. > > OK, that's good. > > But where and how do I explain the reason? You don't. -- Phil Marti Clarksburg, MD << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Posted by okietax on April 12, 2007, 12:25 am Please log in for more thread options Just because you are issued a 1099-G does not mean it is taxable. Anyone who receives a state refund receives the 1099-G, but not all who receive the refund deducted their state taxes. Not everyone itemizes, in fact many people do not who should. You do not need to issue an explanation. There will be no cross reference. << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2006) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted 1099G and State Tax Refund February 20, 2010, 4:54 pm Question about 529 account and state / federal taxes and federal gift taxes July 23, 2007, 1:16 am Overpay state tax on purpose to get a higher federal refund December 10, 2006, 8:26 pm Will my state tax refund be taxable on next years federal return? February 18, 2009, 7:55 pm Paying taxes on a Federal refund? January 5, 2010, 12:22 am 1099G does not agree with actual refund (not interest...) March 5, 2010, 9:25 am State Taxes on Federal Interest April 2, 2009, 10:17 pm US Federal and California state taxes: phaseout nightmare! April 15, 2007, 1:42 pm Excel Routines to Calculate Federal and State Taxes? November 14, 2009, 4:02 pm Federal income tax on state income tax refund March 13, 2009, 7:37 pm