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NativeMasshole t1_j7soov1 wrote

Reply to comment by Dobagoh in IRS May Tax Massachusetts Refunds Sent In 2022 Under 62F Law by Lilslugga2002

I just don't understand why it would count as income again. The state tax doesn't get deducted on federal taxes, so you already paid federal taxes on it when you earned the money in 2021. Is it just because it could impact how your itemized deductions were calculated? Is that why it's not applicable for the standardized deduction?

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wallet535 t1_j7spm8n wrote

If you itemize, yes, you can deduct state taxes withheld (and paid) from federal taxable income. That’s why state refunds are added back to your federal taxable income the following year. It’s not relevant if you take the federal standard deduction.

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