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modernhomeowner t1_j8pi81t wrote

Reply to comment by hockeystick13 in MA and 3 other states singled out by IRS for taxable state refund by kenseyx

If you used it as a deduction on your tax return, then it wasn't already taxed. It's not taxable if you didn't use it as a deduction.

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hockeystick13 t1_j8pien5 wrote

I think my jest is that it was because they claimed we as a state went over the tax threshold so here ya go. Made me just go it’s the money we paid in taxes, but I get what you mean. This is why I’m not in any sort of finance tax job l

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modernhomeowner t1_j8pjbk3 wrote

Only 13% of taxpayers itemize, so 87% automatically won't have to pay tax on the refund. Out of the 13%, only those who didn't pay at least $10k in state tax will have to claim the refund as earnings. Since the vast majority of people who itemize are high earners, this is a very small number of people. I'd suspect the percent of people who will have to pay tax on the refund will be in the very low single digits, maybe even 1% or less of the population.

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