On your 2021 federal tax return did you claim an itemized deduction for state income tax? If not, you do not report the refund on your 2022 tax return. You claimed an itemized deduction for state income tax if there is an amount on Schedule A line 5a, and the box on that line is not checked.
If you did claim an itemized deduction for state income tax, when you prepare your 2022 tax return you have to enter the refund amount on the Form 1099-G that Virginia will send you. TurboTax will use information from your 2021 federal tax return to calculate how much, if any, of the refund has to be reported as taxable income.
You cannot directly offset the Georgia tax that you paid against the Virginia refund. But if you itemize deductions for 2022, you will be able to claim a deduction for part or all of the Georgia tax that you paid in 2022.
