State Income Tax
Description and Definition of State Income Tax
You may be required to pay a state tax based on your income. At the present time 45 states have enacted an income tax, although 2 of those only tax interest and dividends. You can deduct on your federal income tax return state tax paid in the year you pay it or have it withheld from your pay. If you later receive a refund of state income tax you had previously deducted you must include the refund on your federal income tax return.
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