Thanks for the reply. I didn't fully understand your response however, especially the "... not relevant for purposes of state ..." What is not relevant? I've looked at the State refund WS and changed the numbers in TT to see how the taxable portion of the state refund changes.
I could make the example simpler to remove SALT and say "I owed $8000 in taxes in 2023 (i.e. all was deducted in 2023)". If I got a state refund of $1000 the federal form would say "Well, you actually should have only claimed $7000 and so you are going to have to pay some taxes on that $1000 refund since you claimed more than you should have in 2023. And so if I enter all $5000 of the refund I would be taxed even more!
I think I should remove the amount of those state tax credits from the amount I enter on the federal as state refund, but I cant find anything that even discusses this and hence I'm turning to the experts here.
Thanks fanfare.
Regards, James
