Greetings everyone! I have a confusing situation (which is actually a sequel to a tricky one from last year), so I thought I'd ask for help.
So in 2022, my employer erroneously withheld taxes for the wrong state (they withheld for Maryland (office location) instead of Virginia (my home); you can read the details here).
I was able to get the erroneously withheld Maryland taxes completely refunded, which I then used to pay my Virginia state taxes (for which nothing had been withheld.)
However, now as I am working on my 2023 taxes, Turbo tax is saying that part of that Maryland tax refund ($4,972!) is taxable.
Can that be right? Seems weird that money which was refunded to me due to an error would be considered taxable. Am I (or is Turbotax) doing something wrong here? Please let me know.
Thanks in advance for any assistance on this!
—snoqualmie17
