2011 State tax refunds are normally taxable the year you collect them. If you overpaid your state income tax last year and your state returned your cash this year, for example, you have to pay taxes on it this year. Expect to receive a form 1099 from your state, reminding you about that returned money. Your state also sent a copy to the IRS, binding you to pay the appropriate taxes. But there are exceptions.
State tax refunds is totally taxable if you detailed the deductions on your federal tax returns. Make sure with your accountant, though, because there's still a possibility that part of it is tax-free even if you did itemize.
State tax refunds is totally taxable if you detailed the deductions on your federal tax returns. Make sure with your accountant, though, because there's still a possibility that part of it is tax-free even if you did itemize.