Mark for follow up Question 37 of 50. Christina and Javier, a married couple filing a joint ret overpaid in 2020. They were able to reduce their 2020 local income taxes paid that year. When Christina and state tax refund they received in 2021 as: O A negative deduction. A recaptured credit. O A refundable credit. Taxable additional income. Mark for follow up

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 37 of 50.
Christina and Javier, a married couple filing a joint return, received a state income tax refund in 2021 for state taxes they
overpaid in 2020. They were able to reduce their 2020 federal tax liability by itemizing and claiming a deduction for state and
local income taxes paid that year. When Christina and Javier file their 2021 return, they may need to report all or part of the
state tax refund they received in 2021 as:
A negative deduction.
A recaptured credit.
A refundable credit.
Taxable additional income.
Mark for follow up
Transcribed Image Text:Mark for follow up Question 37 of 50. Christina and Javier, a married couple filing a joint return, received a state income tax refund in 2021 for state taxes they overpaid in 2020. They were able to reduce their 2020 federal tax liability by itemizing and claiming a deduction for state and local income taxes paid that year. When Christina and Javier file their 2021 return, they may need to report all or part of the state tax refund they received in 2021 as: A negative deduction. A recaptured credit. A refundable credit. Taxable additional income. Mark for follow up
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