Q. Is it required to deduct "State Income Taxes Paid" if you itemize (Schedule A)?
A. No.
You may limit your state income tax deducton amount to the amount that will not be refunded.
You have to use a work around in TurboTax (TT). For how to do that, see https://ttlc.intuit.com/community/state-taxes/discussion/excess-state-income-tax-withheld-for-2017-i...
As others have said, the taxable amount of your state refund may be less that the full amount, if the amount of sales tax you "coulda deducted" was more than the allowable income tax deducted. This is unusual, but should be considered.
