Knowledge Base

10175: State Taxable Refund - Update to Screen 3

1040 Individual Generally

The state refund that updates to federal screen 3 does not match the refund amount from the prior year. Why?
The taxable amount updates to screen 3, Schedule 1, part I, line 1 (line 10 in Drake18 and prior) rather than the full refund amount. To view where this amount is coming from, open the prior year DrakeXX return and refer to the Wks Refunds 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.

Related Links

Also In This Category

Article has been viewed 6.8K times.
Last Modified: 3 Months Ago