Taxable Income Tax Refund
Question: Tax Refund from NJ and paid taxes to CA in 2005 do I still have to report the NJ tax refund?
I was a non-resident in CA and resident of NJ for 2005. I got a Tax refund of 1200 from NJ and paid additional taxes of 1800 to CA in 2005 do I still have to report the NJ tax refund for my 2006 Federal return on Line 10 “Taxable Refunds, Credits, or Offsets of State and Local Income Taxes” I got Form 1099-G from NJ but nothing from CA. Please advice.
BTW – I did itemize my deductions for 2005
Answer: Since you itemized and deducted state taxes last year, you may owe tax on the NJ refund. If you use a software package, it will figure the taxable recovery based on your prior year itemized deductions.
At the same time, you can deduct the $1,800 taxes paid to California in 2006. California would not send you any form to document your taxes paid.
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