<p>I seem to have caused some confusion with my earlier post.
a. I was talking about refunds of state taxes not federal taxes.
b. State tax refunds may have to be declared as income in the subsequent year if you itemised deductions on your federal tax.
From <a href="http://www.irs.gov/taxtopics/tc405.html%5B/url%5D">http://www.irs.gov/taxtopics/tc405.html</a>
[quote]
If you took an itemized deduction for state or local taxes on your Federal income tax return, you may have to include all or part of the refund in your income on your tax return. You should receive Form 1099-G (PDF), Certain Government Payments, advising you of the refund amount. You can usually use the worksheet in the Form 1040 Instructions to determine the taxable portion of your refund. However, if any of the exceptions listed in the instructions applies to you, refer to Publication 525, Taxable and Nontaxable Income. It contains further information on how to compute the taxable portion of the refund, and special worksheets.
If you did not itemize deductions on your Federal tax return for the year to which the refund applies, do not report any of the refund as income
[/quote]
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c. If such a refund is considered taxable it has to be declared as income on your federal tax refund and the only form you can do it on is the 1040. You cannot file 1040a or 1040 ez which means you are ineligible for the simplified needs test. Does not sound like it applies to you if you filed 1040a.
Sorry if I caused confusion</p>