I do not meet any of the reasons my state income tax would not be taxable.
1. I itemized last year. Line 5a of 2018 Schedule A does have an amount listed. (I did not use Turbotax last year.)
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.)
I called Turbotax live CPA assistant who was also perplexed as to why the refund was not taxable, but she could only say it was because the State and Local Income Tax Refund Worksheet said it was. She was not allowed to show me the worksheet. 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, and checking my answers a third time, 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 did apply that refund to my estimated 2019 state income tax. Does that make it non-taxable?
I could select the button that tells Turbotax to "Make my whole refund taxable" but why is that button there?Why would anyone want to to that?
Thanks to anyone who can help.
