Question

Since the Matthews did not itemize for 2018, their state refund is not reported on Form 1040.

a. True
b. False

Answer 1

The correct answer is letter "A": True.

Step-by-step explanation:

According to the Internal Revenue Service (IRS), some state income tax refunds can be taxable income in some cases. They must be reported in the Form 1040 only in the case the taxpayer claimed a state and local taxes deduction the previous year if they were itemized. Usually, when standard deductions are claimed, state and local income tax deductions are not itemized.