State tax question

I have been in Kansas for almost 4 years. This year I received a taxable income statement from the State of Kansas for $67. It took me awhile to figure out where I got $67 from the state. Lo and behold, it was my state income tax refund from last year! Are you kidding me?? I am being taxed on my state income tax refund from last year? It is the first time I have received one of these, so I am a bit perplexed. Is this normal procedure from the State of Kansas?

a 1099? Possibly a refund paid to you from another state, taxed as income in Ks.? Let me flip thru my 40,000 pages of tax law and see..........

The IRS allows you to take an itemize deduction of taxes paid for either state and local income taxes or state and local sales taxes. For most people its the income tax (unless you have had a few larger purchases during the year and paid a bunch of sales tax). Since the majority of individuals are cash base tax filers (income/expense in the year received/paid), you can deduct the amount of state taxes withheld from your pay.

You had too much withheld, so they refunded the amount, and thus it would be an offset in the current year amount paid. Did you itemize (sch. A) on last years federal return? If not, don't worry about it, as you didn't deduct these state income taxes (you would have just taken the standard deduction instead). If you did itemize, then it could be taxable, there's a worksheet to help you figure it out. Go to page 22 of the instructions: http://www.irs.gov/pub/irs-pdf/i1040.pdf

Or here is a google search that probably explains it better, just choose the site you like:

google search

Thanks for the info!