I noticed on my IL state forms my prior year refund from NY State (2018 tax withheld refunded during 2019) was subtracted from my Federal AGI via IL form 1040 base income step 3 line 7. But... my 2019 Fed income doesn't include the refund amount because my Fed deduction in 2018 was the standard deduction, i.e. not itemized. So, while I don't want to unnecessarily increase my IL tax liability, it appears the Turbo Tax software is making a mistake by subtracting an amount that isn't originally included in my Fed AGI. The software knows I did not itemize deductions last year so should be ignoring state income tax refunds this year, no? Or... I am thinking about this incorrectly or have made some sort of error.
The schedule M documentation indicates an offset for line 6 (Illinois refund) but it appears the figure is being pulled off line 7 (other state refund). I believe this is an error in the TurboTax software. The help shows:
Schedule M : Line 25-Recovery Item
From federal Form 1040, Schedule 1, line 1, plus federal Other Income Statement, line 10b, minus Illinois Form IL-1040, line 6.
Any advice regarding is appreciated. Happy to clarify further as needed.
