I received a state refund in 2018 for my 2017 taxes due to an error/misunderstanding on a small business tax deduction. That error was brought to my attention in November and I repaid my refund and then some. However I still received a 1099-G for the original refund. Now I am doing my 2018 taxes, if I input my 1099-G refund amount as reported my taxes go up, but then when I input other taxes paid my taxes do not go down because I had already hit my 10k cap on the deduction. Any suggestions on how to argue I should not have to count that as income because it was ultimately repaid. I am tempted not report it but I don't want to be flagged.
