Could you clarify some things for me? This is all discussing California, right?
Did you enter the 1099-G on the federal return? If so, please explain this: "Here I have to enter the larger amount $X and nowhere did it ask me to enter the smaller amount of $Y." Why aren't you entering the actual amount on the 1099-G ($Y)?
"When i go thru the interview and click update the CA refund it does not ask me to enter the new 1099G." - I have no idea what you mean here. Where are you "updating" the CA refund?
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