In April 2017, Bertie, a calendar year cash basis taxpayer, had to pay the state of Michigan additional income tax for 2016. Even though it relates to 2016, for Federal income tax purposes the payment qualifies as a tax deduction for tax year 2017.

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State income tax payments can be deducted on the federal return in the year they are paid, regardless of the tax year they relate to. So, Bertie can deduct the payment on his 2017 federal tax return.

In April 2017, Bertie, a Calendar Year Cash Basis Taxpayer