Circling back on this discussion, with a bit more explanation and (hopefully) a more exact question:
Background:
2019 Tax Returns
* We received an OR kicker in 2019 of $4000 (rounding)
* The $4000 reduced our state taxes due. We still had to pay OR state taxes of $450.
* On the 2019 federal return we itemized. On Schedule A, the kicker was useless as state taxes paid far exceeded the $10,000 (similar to @StFarris 's case)
2020 Tax Returns
* We received a 1099-G for the 2019 kicker of $4000
Question:
First, do we enter 1099-G under "Wages & Income" or under "2019 State Taxes Paid in 2020"? That is, is it an income or a deduction?
If under Wages and Income:
* In TT, we see we can enter the 1099-G as "State and Local Tax Refunds on Form 1099-G" but we paid taxes on our state return and did not get a refund.
* In TT, we also see an option to enter "Other 1099-G Income". We come to an option to select the type of payment with options as:
* Taxable grant
*Agricultural program payment
* Market gain on CCC loans
* Reemployment trade adjustment assistance (RTAA) payment
* Business or farm tax refund
None of these appear applicable. Perhaps the "Taxable grant" is the closest item. Doing so, brings us to a page asking to describe the Taxable Grant with the following options in Payment information:
* Business or farm refund
* Reemployment trade adjustment assistance (RTAA) payment
* Taxable grant
*Agricultural program payment
* Market gain on CCC loans
Again, none of these really apply with the exception of Taxable Grant. If we enter $4000 in taxable grant, our Federal and State taxes go up by $1800 and $500, respectively. However, we did not take the itemized deduction on the Federal return, although we did receive a $4000 benefit. Is this where we enter the 1099-G for the kicker?
If under 2019 State Taxes Paid in 2020:
If we paid $20,000 in state taxes in 2019, received the $4000 kicker (officially released in 2020) and owed another $450 in state taxes (paid in 2020), what do we enter in 2019 state tax paid in 2020, if anything? Options are:
* $4,450 = $4,000 (kicker) + $450 (paid on state tax return) - results in federal tax dropping $18
* $450 = $450 (paid on state tax return) - results in federal tax dropping $2
Thank you in advance for any guidance you can provide.
