I itemized last year and deducting my state income taxes did reduce my federal tax. My state and local taxes were less than the $10,000 limit. I did not use the option to deduct general sales tax. (The sales tax would have been much smaller.) I did not meet any of the exemptions for not using the State and Local Income Tax Refund Worksheet, which when I completed manually, said the refund is taxable. I used another reputable service which said they were taxable. Yet, Turbotax tells me, after twice going through the process, that my refund is not taxable. That's good for me, but shakes my confidence in Turbotax. Are there any other reasons why a state income tax refund would not be taxable?
