Where to report your state refund depends on whether you received it as a check, direct deposit, or offset

You report a state income tax refund on your federal tax return because the IRS needs to know about all income you received during the year — and a refund counts as income in the year you get it, not the year you paid the taxes. The form you use is Form 1040, Schedule 1, which is where you report other types of income the main return doesn't cover.

The amount you report is whatever you actually received. If your state sent you a $800 check in 2024, you report $800. If your state applied your refund to next year's estimated taxes instead of sending it to you, you still report what the refund was worth — your state tax agency will tell you this amount on a notice or statement.

You only report state refunds on your federal return. You do not report them again to your state — your state already knows about its own refund because it issued it.

Key Takeaways

  • Report your state income tax refund on Form 1040, Schedule 1, line 1 (other income), in the tax year you received the refund.
  • The amount you report is whatever your state actually sent or credited to you, shown on a state notice or 1099-G form.
  • You report the refund only to the federal government, not to your state — your state already has its own record.
  • If you received a 1099-G from your state, use the amount shown there, but check it against your own records because errors happen.

Finding the refund amount on your state documents

Your state will send you a notice or form showing the refund amount. The most common form is a 1099-G, which some states issue for refunds over a certain amount (the threshold varies by state). The 1099-G shows the refund in Box 1.

If your state did not send a 1099-G, look for a refund notice in the mail or check your state tax agency's online account. The notice will show the refund amount and the date it was issued or deposited. Keep this document — you will need it to verify the amount you report.

If you received a partial refund or your refund was split between multiple payments, add them together. Report the total amount you received in that tax year.

Entering the refund on Schedule 1

Form 1040, Schedule 1 is a separate sheet that attaches to your main Form 1040. On Schedule 1, line 1 is labeled "Other income." This is where state income tax refunds go.

Write the refund amount on line 1. Then carry that amount down to Form 1040, line 8, which adds it into your total income for the year. If you are using tax software, it will usually ask you directly about state refunds and place the amount in the right spot automatically.

You do not need to attach your 1099-G or state notice to your return, but keep it with your tax records in case the IRS asks questions later.

What happens if you received a 1099-G with the wrong amount

If the 1099-G your state sent shows a different amount than what you actually received, report the amount you actually got, not what the form says. Then contact your state tax agency and ask them to issue a corrected 1099-G.

Errors on 1099-Gs happen — a refund might be recorded twice, or the state might have included a payment you made that year instead of a refund. Your state tax agency can investigate and send you a corrected form if needed. This usually takes a few weeks.

If you report the correct amount and the IRS later receives a different 1099-G from your state, the IRS will send you a notice asking about the difference. You can respond with a copy of the corrected 1099-G or your state refund notice showing the actual amount.

Reporting refunds when you did not receive a 1099-G

Some states do not issue 1099-Gs for smaller refunds, or they issue them only in certain situations. If you received a refund but no 1099-G, you still report it on Schedule 1, line 1.

Use the amount from your state refund notice, your bank deposit record, or your state tax account online. Write a note on your return or keep documentation handy explaining where the amount came from, in case the IRS asks. The IRS is unlikely to question a state refund you report voluntarily, but having proof protects you.

State refunds and your federal tax situation

Reporting a state refund increases your federal taxable income for that year. This might move you into a higher tax bracket or reduce credits you were counting on, depending on your overall income. It is not a penalty — it is how the tax system works. The IRS taxes refunds because they are money you received.

However, there is one exception: if you took the standard deduction in the year you paid the state taxes, you cannot deduct those state taxes, so the refund is not really "income" in the economic sense. The IRS still requires you to report it, but you are not being taxed twice. If you itemized deductions and deducted state taxes, the refund reduces the benefit you got from that deduction, which is why you report it.

Frequently Asked Questions

Do I report a state refund if I got it in a different year than I paid the taxes?

Yes, you report it in the year you received it, not the year you paid the taxes. If you paid state taxes in 2023 but received the refund in 2024, you report it on your 2024 federal return. The year matters because it affects which tax year's return the refund appears on.

What if my state refund was applied to next year's taxes instead of sent to me?

You still report it as a refund in the year it was issued, even though you never saw the money. Your state notice will show the amount that was credited forward. Report that amount on your federal return for the year the credit was applied.

Do I need to report a state refund if I owe federal taxes?

Yes. Reporting income and owing taxes are separate things. You report the refund as income, which might increase what you owe federally, but you still have to report it. The IRS will catch it if you do not, and it is easier to report it correctly from the start.

Can I deduct state taxes I paid if I am going to get a refund?

You can deduct the full amount you paid in the year you paid it, if you itemize deductions. When you get the refund in a later year, you report that refund as income on that year's return. The two transactions are separate and both are reported.

What if I lost my 1099-G or state refund notice?

Contact your state tax agency and ask for a copy or a statement showing the refund amount and date. Most states can email or mail this to you within a few days. You can also check your state tax account online if you have one set up — the refund should be listed there with the amount.