Why is the amount in the Turbo Tax State & Local Tax Refunds section lower than the amount shown in box 2 of my form 1099-G? Which amount should I use?

[ShellyB]

What would cause these two amounts to be different?

[Phillip1]

The state tax refund is only taxable to the extent that you received a tax benefit from deducting your state income taxes on your return.

If you used TurboTax last year, the program will calculate the taxable amount of your state tax refund based on your itemized deductions and other information, but the Form 1099-G that was sent by the state has the full amount of your refund.