It summarizes ALL of the taxes you have paid either directly or through withholdings on Forms such as W2s, 1099s, etc for both your federal and state returns. For example, that number would include both of your Federal and state withholdings from your W2s. It can also include local taxes, refunds applied to this year's taxes from a prior year, balances due from prior years that were paid in this year, and payments made with any extension you might file.
