Have a Tax Question? Ask a Tax Expert
Sorry, but a tax refund is property of the bankruptcy estate unless there is another exemption available. The refund amount due to you is treated much like cash you have in the bank, or on hand, when you filed the bankruptcy.
Usually, if you file your bankruptcy after January 1, but before you received your refund, the Chapter 7 Trustee will take your share of the entire refund. Often, when the filing is earlier in the year the amount taken will be prorated to the date of filing.
There may be some differences due to state law. For example, in New York you can file for a cash exemption if you are not a homeowner that takes the homestead exemption. See the article at bankruptcylawnetwork
Each state's allowable exemptions differ. Tax refunds are not exempt anywhere just because they are refunds.
I hope this helps even though it is likely not what you wanted to hear.
I did find a case in regard to tax refunds in Oklahoma claiming to be exempt under Okla. Stat. tit. 31, § 1.1 which exempts "that portion of any earnings from personal service necessary for the maintenance of a family or other dependents supported wholly or partially by the labor of the debtor." The court ruled that the tax refund was not exempt under that Okla. statute
The entire case is at http://ca10.washburnlaw.edu/cases/2000/10/99-6116.htm
From that case:
Oklahoma has opted out of the federal exemptions and instead has limited its exemptions to those provided under Okla. Stat. tit. 31 and other provisions of state law. See Okla. Stat. tit. 31, §1(B) ("No natural person residing in this state may exempt from the property of the estate in any bankruptcy proceeding the property specified in subsection (d) of Section 522 of the Bankruptcy Reform Act of 1978, Public Law 95-598, 11 U.S.C.A. 101 et seq., except as may otherwise be expressly permitted under this title or other statutes of this state."); see also Linn, 52 B.R. at 64 (noting that Oklahoma has "opted out" of the federal exemptions). Accordingly, we must decide whether state law, as opposed to federal law, allows an exemption for state and federal income tax refunds.
From the above, it is obvious that the tax refund must still be exempt under Okla. Stat. title 31 ; but I can not give a legal opinion and this forum is not conducive to gathering all the information need for me to give proper guidance on your particular situation.
Your right to a tax refund is an asset just like any other, subject to administration by the trustee. IF the trustee says to list it then you should follow the trustee instructions. Since I am not aware of the other amounts that are listed and whether those amounts exceed the allowable exemptions I must defer to the trustee on the propriety of putting the refund as exempt.
The Oklahoma Bar Association has an article at http://www.okbar.org/public/brochures/bankbroc.htm that answers "What property may the debtor claim as exempt?" and that confirms 'Oklahoma has "opted out" of the federal bankruptcy exemptions so debtors may not select between federal bankruptcy exemptions and the Oklahoma exemptions.'
I hope this helps in regard to your tax refund and Oklahoma Bankruptcy exemptions.