1099-G for refund from 2017 taxes received in 2018, but then error and had to pay money back....10k cap on state and local tax deduction

[dwoodyard-1]

I received a state refund in 2018 for my 2017 taxes due to an error/misunderstanding on a small business tax deduction. That error was brought to my attention in November and I repaid my refund and then some. However I still received a 1099-G for the original refund. Now I am doing my 2018 taxes, if I input my 1099-G refund amount as reported my taxes go up, but then when I input other taxes paid my taxes do not go down because I had already hit my 10k cap on the deduction. Any suggestions on how to argue I should not have to count that as income because it was ultimately repaid. I am tempted not report it but I don't want to be flagged.

[Critter]

Sorry ... but you MUST report the refund you received in 2018 on the 2018 return form 1040 if you itemized deductions on the 2017 return.   

THEN ... the taxes you paid in  2018  to the state is a deduction on the 2018 Sch A .... you CANNOT net them against each other.  You are an unintended  victim of the new tax laws.