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Level 1
posted Jul 21, 2019 12:31:21 AM

How do I amend Tax Report 2017 which, per mail from IRS, should have reported taxable state tax refund in Form 1040, line 10? TurboTax has numbers but won't fill line 10?

Dear experts,

I recently got a mail from IRS questioning why my Tax Report 2017 did not report state tax refund received in 2017 as taxable income.

As I've been reviewing all the forms and instructions I can't see why indeed this refund shouldn't be taxable.

I reviewed this help article: https://ttlc.intuit.com/community/refunds/help/do-i-need-to-report-the-state-or-local-refund-i-got-last-year-is-it-taxable/00/25746

And I think all conditions requiring the tax refund to be reported as taxable income have been met:
* I did use Itemized Deductions (Schedule A) in Tax Report 2016,
* And I did claim state income taxes withheld in that Schedule A,
* And this did result in an increase to the Federal Tax refund I received in 2017.

I tried to amend TaxReport 2017: downloaded the tax file and the TurboTax 2017 Desktop app, and I see that correct refund amounts are in the system, but for some reason Line 10 in Form 1040 is 0 instead of the amount of state tax refunds...

I would greatly appreciate guidance on whether this tax refund is taxable, and if it is, how do I make TurboTax put it into Form 1040 ln 10 and update any dependent lines in the report accordingly.

Thanks!

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1 Best answer
Level 15
Jul 21, 2019 7:09:07 AM

Try this ... in the 1099-G entry screens ... if there is one that lists last years amounts from the return say NO it is not correct then on the next screen choose to skip the calculation section and make the entire amount taxable. If that doesn't work then switch to the FORMS mode and override the entry on the form 1040 line 10 so the archived file is correct.

2 Replies
Level 15
Jul 21, 2019 7:09:07 AM

Try this ... in the 1099-G entry screens ... if there is one that lists last years amounts from the return say NO it is not correct then on the next screen choose to skip the calculation section and make the entire amount taxable. If that doesn't work then switch to the FORMS mode and override the entry on the form 1040 line 10 so the archived file is correct.

Level 1
Jul 21, 2019 2:55:03 PM

Thank you, Critter,

 

I re-entered data for the state tax refunds in TurboTax Desktop app which then asked a few questions including whether or not I claimed state taxes in Itemized Deductions in TaxReport 2016 (I guess this was the question I've answered incorrectly when doing Tax Report 2017), and then the taxable refunds did show up in Form 1040 Line 10.

 

Thank you very much for help!!