I had a refund or credit on my 2016 Federal taxes. I decided not to take it but put it towards the following year 2017. However the next year it did not come up while doing taxes. So a month after doing my 2017 taxes in 2018 I got the Federal refund even though I was not expecting one. So now, how do I deal with this in 2018 taxes. How do I count this in my State taxes? Do I have to count this as income on 2018 ? I itemized and I might also be getting a refund this year in addition to the previous year.
How do I count this in my State taxes?
Any Federal taxes you pay by payroll deduction, or when you file your Federal return; and any refunds you receive when your file your federal return, or any credits you put towards your federal taxes the next year have no impact on your state taxes.
Individuals don't get a deduction for taxes they pay to the federal government while doing their state return. That also means that if they get a federal refund they don't have to account for it on their state taxes.
Do I have to count this as income on 2018 ?
In the past many people who itemized on their federal taxes did include a deduction on the federal return for their state taxes they paid. If they did get a state refund, or have to pay state taxes, when they filed in April X did have to account for this income or expense when they filed their federal return in April X+1.
The new tax laws for 2018 did change the number of people who are itemizing on their federal returns this April, but any state refunds from last year still have to be accounted for.