During 2017, Mark's employer withheld $2,000 from his wages for state income tax. Mark claimed the $2,000 as an itemized deduction on his 2017 federal income tax return. His total itemized deductions for 2017 were $9,000 (the 2017 standard deduction was $6,350). Mark's taxable income for 2017 was a negative $20,000 due to substantial business losses. Mark received the $2,000 as a refund from the state during 2018. What amount must Mark include in income in 2018?

Question

Quizplus · Accepted Answer

Mark does not need to include the $2,000 refund in his 2018 income because he did not receive a tax benefit from the deduction in 2017, as his taxable income was negative.

During 2017, Mark's Employer Withheld $2,000 from His Wages for State