During 2018,Mark's employer withheld $2,000 from his wages for state income tax.Mark claimed the $2,000 as an itemized deduction on his 2018 federal income tax return.His total itemized deductions for 2018 were $15,000 (the 2018 standard deduction was $12,000).Mark's taxable income for 2018 was a negative $25,000 due to substantial business losses.Mark received the $2,000 as a refund from the state during 2019.What amount must Mark include in income in 2019?

Question

Quizplus · Accepted Answer

Since Mark's taxable income was negative in 2018, he did not receive a tax benefit from the state tax deduction. Therefore, the refund is not taxable in 2019.

During 2018,Mark's Employer Withheld $2,000 from His Wages for State