State refunds belong on line 1 of Schedule 1, not on the main 1040
If you received a state income tax refund in the year you're filing, you report it on Schedule 1 (Form 1040), line 1, labeled "State and local income tax refunds." You do not put it anywhere on the main 1040 form itself. This applies whether your state refund arrived by check, direct deposit, or offset against what you owed.
The refund amount goes in the box next to line 1. If you received refunds from more than one state, add them together and enter the total. Schedule 1 then feeds into your main 1040 as part of your total income, so the refund does affect your federal tax picture even though you enter it on a separate form.
You only report refunds you actually received during the tax year you're filing. If you got a refund in 2024 for taxes you paid in 2023, you report it on your 2024 return. A refund you're still waiting for does not go on the return yet.
Key Takeaways
- State tax refunds go on Schedule 1, line 1, not anywhere on the main 1040 form.
- You report the refund in the year you received it, regardless of which tax year it was for.
- If you received refunds from multiple states, add them together on a single line 1 entry.
- Schedule 1 is required only if you have income to report on it; if line 1 is your only entry, you still need to file it.
- The IRS already knows about your state refund because the state reports it, so leaving it off triggers a mismatch notice.
Why the IRS already has a record of your state refund
States report refunds they issue to the IRS through the same system they use to report W-2s and 1099s. When your state sends you a refund check or direct deposit, it also sends the IRS a record of that payment. The IRS matches that record against your return when you file.
If you don't report the refund on Schedule 1, the IRS will notice the mismatch and send you a notice asking you to explain the difference. You'll either have to file an amended return or respond to the notice with documentation. Reporting it correctly the first time avoids that back-and-forth.
What happens if you took the standard deduction instead of itemizing
Whether you itemized deductions or took the standard deduction in the year you're filing does not change where the refund goes. It still goes on Schedule 1, line 1. The refund is income to you in the current year, separate from how you handled deductions in the prior year.
The only time a state refund might not be fully taxable is if you didn't actually benefit from the deduction you took. For example, if you itemized state and local taxes in 2023 but your itemized total was below the standard deduction, part of your 2024 refund might not be taxable. The IRS has rules about this, but you still report the full refund amount on line 1 and let the IRS apply any exclusion they determine you're may have access to to.
Refunds from multiple states or from prior years
If you lived in or worked in more than one state during the year and received refunds from each, add all the refund amounts together and enter the total on Schedule 1, line 1. You do not need to break them out by state on the 1040.
If you received a refund for a tax year other than the one you're currently filing—for example, a 2022 refund that arrived in 2024—you report it on your 2024 return, not your 2022 return. The year you receive the money is what matters for federal reporting purposes.
How to file Schedule 1 if it's your only additional income
You must file Schedule 1 (Form 1040) whenever you have income to report on it, even if line 1 is the only line you're using. Attach it to your 1040 when you file. If you're using tax software, the program will prompt you to enter the refund amount and will automatically generate Schedule 1 for you.
If you're filing by hand, print Schedule 1, enter your name and Social Security number at the top, write the refund amount on line 1, and leave all other lines blank. Add the line 1 amount to your income total on the 1040 (it feeds into line 1z, "Other income"). Then attach Schedule 1 to your 1040 before mailing or filing electronically.
When a state refund is offset or reduced
Sometimes a state holds back part or all of your refund to cover unpaid child support, student loans, or other debts. You still report the full refund amount you were may have access to to on Schedule 1, line 1. The offset is a separate matter between you and the state or the agency collecting the debt.
If you're unsure whether the amount you received is the full refund or a reduced amount, check your state's tax website or the refund notice the state sent you. The state will also report the full amount to the IRS, so reporting what you actually received could create a mismatch. Report the full amount the state issued, not what you ended up with after an offset.
Frequently Asked Questions
Do I report a state refund if I didn't file a state return?
If you received a state refund but didn't file a state return, you still report it on your federal Schedule 1, line 1. This can happen if the state issued a refund based on withholding from your paychecks or if you were due a refund under state law even though you didn't file. Report what you received.
What if I'm still waiting for my state refund when I file federal?
Do not report a refund you haven't received yet. Report only refunds that actually arrived in the tax year you're filing. If your state refund comes in after you file, you may need to file an amended return, though the impact is usually small.
Does reporting a state refund increase my federal tax bill?
It can, because the refund is treated as income on your federal return. How much it affects your tax depends on your total income and tax bracket. Some people owe a small amount of federal tax on the refund; others see no change because the refund falls within their standard deduction or is offset by credits.
Can I claim the state taxes I paid as a deduction if I'm also reporting a refund?
Yes. You can deduct state and local taxes paid (up to $10,000 per year) on Schedule A if you itemize. The refund you report on Schedule 1 is separate—it's income in the year you received it. Both can appear on your return in different places.
What if my state refund was for a year I didn't file federal taxes?
You report the refund on the federal return for the year you received it, regardless of which tax year it was for. If you received a 2022 state refund in 2024 and didn't file a 2024 federal return, you would report it on your 2024 return when you eventually file.