Knowledge Base

10175: State Taxable Refund - Update to Screen 3, Line 10

1040 Individual Generally

The state refund that updates to federal screen 3 line 10 does not match the refund amount from the prior year. Why?
The taxable amount updates rather than the full refund amount. To view where this amount is coming from, open the prior year DrakeYY return and refer to the Wks Refunds (WK_REFYY in Drake15 and prior) form in view. Along with determining the taxable refund amount, this worksheet also performs a calculation to determine if the amount should be reduced by unused sales tax.

The amount is updated as an item to verify, so, if you think it should be different, you can adjust accordingly. 

Note: State income tax refund may be taxable in the current year if the client itemized deductions on Schedule A in the prior year.  If the client is itemizing this year and taking the state income tax deduction on line 5 of the Schedule A, the software will generate Wks Refunds.

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