You are not doing anything wrong, and it's not a bug. The property tax deduction reduces your taxable income, which indirectly reduces your tax by a small percentage of the deduction. The property tax credit directly reduces your tax by the amount of the credit. TurboTax does a calculation, as specified by the state, to determine whether the deduction or the credit gives you a greater reduction of your tax. There are a number of situations that can make the calculation somewhat complicated. You get either the deduction or the credit, whichever makes your tax lower.
