Thank you for taking the time to answer.
That's exactly what I have to do. I get a refund for the full amount of taxes I paid CA then I turn around and pay KY, with a penalty. Should I be taxed on the full amount I get from CA, even though a percentage went to KY? Or should I only get taxed on the difference?
For instance, lets say I paid 1,000 in taxes to CA in 2017 and 0 to KY in 2017. With my refund I received from CA which was 1000 (for tax year 2017), I paid 900 to KY for 2017 taxes (800 owed to KY for 2017 + 100 penalty). This year, I have the same situation, and I got a 1099-G from CA showing I received a refund of 1000 in 2018 for my 2017 taxes. For my Federal return for my 2018 taxes, should I get taxed for the full 1000 I received from CA or should I only get taxed on the 100? CA Refund (1000) - KY Taxes Due (900) = 100?
