I am filing my 2022 tax return. I live in VA which requires you to use the method of deduction you choose in your federal tax return for your state tax return. If I choose itemized deduction, I will pay more federal tax by $230 but less state tax by $800. So I am going to choose itemized deduction.
I overpaid my state estimate tax by $4000. If I choose my itemized deduction, I will receive a total refund of $4,800 from the state. Does that mean all those $4,800 are taxable income on my future 2023 tax return or only part of that is taxable? If the $4,800 is only partial taxable, how do I know how much of that is taxable? Thank you!
