If 2017 state income taxes are overpaid and excess is applied to 2018 state taxes and not refunded, is overpayment considered as 2018 income by IRS?

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If 2017 state income taxes are overpaid and excess is applied to 2018 state taxes and not refunded, is overpayment considered as 2018 income by IRS?

Yes it is ... just because you didn't physically get the refund because you applied it to the next tax year doesn't change the fact that you got a refund.

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