1. I itemized last year. Line 5a of 2018 Schedule A does have an amount listed.
2. Deducting my state income taxes did reduce my federal tax.
3. My state and local taxes were less than the $10,000 limit.
4. I did not use the option to deduct general sales tax. (The sales tax would have been much smaller.)
5. I did not meet any of the exemptions (listed in the instructions for Schedule 1 line 1) for not using the State and Local Income Tax Refund Worksheet, which when I completed manually, said the refund is taxable.
Even after twice going through the questions for determining taxability, Turbotax still says my refund is not taxable. I tried another tax on-line software product that said the refund was taxable. Why does Turbotax say it's not taxable? I could select the button that tells Turbotax to "Make my whole refund taxable" but why would anyone want to to that?
