Brian is a cash basis taxpayer and claims itemized deductions. He lives in a state that imposes an income tax. On April 14, 2020, he filed his 2019 state tax return, paying an additional $500 in state income taxes. During 2020, $3,850 of state income tax was withheld from his wages. On April 13, 2021, he files his 2020 state tax return claiming a $700 refund. He receives the refund August 3, 2021.

How much can Brian claim as an itemized deduction for state income taxes on his 2020 federal tax return which he files in April 2021?

• A.

  $4,050.

• B.

  $5,250.

• C.

  $3,850.

• D.

  $4,350.