I paid taxes owed to the IRS. Can that be a deduction on my state return?

July 14, 2020 by David E. Du Val, EA
Hand with pen writing Tax Deduction

If I paid taxes owed to the IRS in 2019 for 2018 can I use that as a deduction on my state tax return as additional Federal withholding taxes on my 2019 return?

Deborah


Deborah,

Good question, as the answer for most states is no. However, that is not true for your home state of Alabama. Six states allow some form of this tax break (AL, IA, LA, MO, MT, and OR), but only Alabama, Iowa, and Louisiana allow a full deduction for all federal income taxes paid.

Deductibly Yours,
Dave

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David E. Du Val, EA
Chief Compliance Officer for TRI Holdco

 

Dave Du Val, EA, is Chief Compliance Officer for TRI Holdco. Inc., the parent company of TaxAudit, and Centenal Tax Group. A nationally recognized speaker and educator, Dave is well known for his high energy and dynamic presentation style. He is a frequent and popular guest speaker for the California Society of Tax Consultants, the California Society of Enrolled Agents and the National Association of Tax Professionals. Dave frequently contributes tax tips and information to news publications, including US News and World Report, USA Today, and CPA Practice Advisor. Dave is an Enrolled Agent who has prepared thousands of returns during his career and has trained and mentored hundreds of tax professionals. He is a member of the National Association of Tax Professionals, the National Association of Enrolled Agents and the California Society of Enrolled Agents. Dave also holds a Master of Arts in Education and has been educating people since 1972. 


 

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