In your situation, subtract the refunded amount that was credited to you (the amount on the 1099-G) from the amount of state tax originally withheld and enter that number as the amount of "Withholding not already entered on a W-2 or 1099"
The TurboTax program is reading the 1099-G as a tax refund.
State tax refunds are always received the year after the tax year that they pertain to, for example, if you earn a state tax refund for tax year 2022, you'll get that refund in 2023.
Your situation is similar to some state rebates. The program has no way to subtract that income from a previously made payment. The Tax Payer (you) need to do the math and enter the final answer into the program.
Entering the 1099-G like a state tax refund can only end one of two ways, the tax refund is disregarded or treated as income.
Rebates and Other Types of Refunds are not treaded as Income, but do lower the deduction you are allowed for the original payment.
Keep the 1099-G and records of the HARPTA tax collected at closing with your tax file.
@russm133
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