During 2016,Mark's employer withheld $2,000 from his wages for state income tax.Mark claimed the $2,000 as an itemized deduction on his 2016 federal income tax return.His total itemized deductions for 2016 were $9,000.Mark's taxable income for 2016 was a negative $20,000 due to substantial business losses.Mark received the $2,000 as a refund from the state during 2017.What amount must Mark include in income in 2017?

Question

Quizplus · Accepted Answer

A)Since Mark would have owed no income tax even without the state tax deduction,the refund is not taxable.He received no tax benefit.

During 2016,Mark's Employer Withheld $2,000 from His Wages for State