Hi, thanks for the reply. So let me make sure I understand what you are saying….We received 2 separate 1099-R’s for 2020. Mine had 0 state tax withheld, hers had appx 2k withheld so her gross distribution was 25k net we received was 23k. I entered the numbers in TurboTax exactly as they were on the 1099 and elected the 3 year repayment. Federally, 1/3 of the total income has been taxed correctly but due to the increase in taxable income I had to pay Last year the state recognized that the total amount of liability for her distribution had been paid and we received money back from the state. This year it seems that the state is not recognizing that her distribution paid tax on the whole 25k during the withdrawal year. I don’t think there should be any more liability on her distribution. It feels as if I’m being taxed twice on the same withdrawal. Am I thinking about this the wrong way?
