If you received a refund, you can either get it in the mail or have it applied to your next year's taxes. You actually DID receive that money. You may not have cashed a check, bu you got it back in the form of reduced estimated tax payments. So it is taxable.
There will be a question in Turbo Tax that helps you figure that out:
1. Click Federal on the left-hand side
menu.
2. Click Income across the top.
3. Scroll down to Other Common Income and
click Show more.
4. Click Start or Revisit by Refunds
Received for State/Local Tax Returns.
Put your 1099-G in and select 2016 from the drop-down (see attached). Turbo Tax will calculate it correctly, based on how you filed (itemized vs standard) in 2016 or 2017.
