On April 30, 2017, Justin received state income tax refund of $300 on his 2016 s

Question

On April 30, 2017, Justin received state income tax refund of $300 on his 2016 state tax return. Justin used the standard deduction on 2016 federal income tax retun. How should Justin report the $300 state income tax refund on his tax return? O He should report S300 income on his 2017 tax return. O He should reduce the amount of his state income tax deduction on 2017 Schedule A by $300. O He should amend his 2016 tax return. The $300 state income tax refund has no impact on his 2016 or 2017 tax returns.

Explanation / Answer

When income tax return is filed and if income tax paid is in excess of income tax payable then income tax refund can be claimed,

When subsequently the income tax refund is received, the refund does not impact the income tax return.

Hence correct answer is

The $300 state income tax refund has no impact on his 2016 or 2017 tax returns.

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