2023 TurboTax automatically carried over to the 2023 return as adjusted gross income a $5 state income tax refund from the 2022 return prepared with TurboTax. Recomputing the 2022 return (with 2022 TurboTax) without the $5 deduction does not result in an increase in the tax liability reported on the 2022 return because the 2022 Tax Table was required to be used to compute the tax. The taxable income for 2022 without the $5 deduction fell with the same taxable income bracket; therefore, the tax liability did not change with the deduction. Under Sec. 111 of the Internal Revenue Code, the $5 refund does NOT have to be reported as income for 2023 because no tax benefit resulted from the deduction claimed on the 2022 income tax return. How do I override the $5 entered as income on the 2023 return by TurboTax?
