Going by the instructions provided by the IRS, as well as by TurboTax, I also DON'T qualify for a pass on my state income tax refund. In 2018, I DID ITEMIZE (Schedule A), and, I DID NOT use the General Sales Tax deduction. However, you may recall that 2018 was the first year of the itemized deduction $10K CAP. In 2018, I paid $14K in State and Local taxes, and $5K in State and Local Real Estate taxes ($19K total). My State income tax refund was $2,700. I believe because I lost $9K to the cap ($19K - $10K), that the refund amount ($2,700) wouldn't have had a bearing on my 2018 tax liability, and that's why it is now NOT TAXABLE in 2019. So, as long as the cap remains, we will likely need to remember to manually(??) monitor this issue, unless TurboTax can do a better job of showing us WHY our state income tax refunds MAY or MAY NOT be taxable.
