My husband and I sold VT real estate in 2023 and received form RW-171. As we had a loss on the sale, we expect to receive this entire amount back when we file our taxes because we don’t owe any VT income taxes as we aren't residents.
Turbotax instructs me to first enter the amount from RW-171 Line 12 on my Federal return under “Estimates and Other Taxes Paid”. I did that. Then when I answer the questions for VT Form IN-111, I’m also prompted to report this amount. However, Turbotax is then DOUBLE-counting this payment and saying my VT refund will be twice the amount withheld. Clearly this is wrong. Additionally, during the state review Turbotax gives me an error message saying “Vermont real estate withholding should not be greater than total Vermont tax withheld.” When I look at the worksheet, I see that Turbotax is including the withholding from form RW-171 on line 25b of form IN-111. It should not do that — per the instructions for form IN-111 from the state of VT, it says specifically NOT to do this. However, I can’t delete it in Turbotax.
Two questions:
1. How can I delete the amount that was inaccurately added to line 25b (so that I’m only being refunded the actual amount withheld), and
2. How can I clear the error on my return?
