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Can I handle this special case state refund 1099-G of $A without an over ride?

How do I handle this special case state refund 1099-G of $A? Special case Info: 1. I used TT 2016 and 2017 for both federal and state in question. 2. I paid AMT of $B in 2016 and will pay AMT of $C in 2017. 3. I paid 2016 state estimated tax of $D in January 2017. I applied all of $A to my state estimated tax for 2017. $B, $C, and $D are all greater than $A. IRS PUB 525 says none of $A is recoverable/ reportable income for 2017. TT keeps adding some or all of $A to my 1040 lines 10 and 37 which makes my AMT too large.

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1 Best answer

Accepted Solutions
Anita01
New Member

Can I handle this special case state refund 1099-G of $A without an over ride?

When you enter the state tax refund, Continue and you will be asked a few questions, including whether you want to calculate the portion taxable based on having paid AMT.  If you say Yes, you will be taken through a series of questions to determine if any of the state tax refund is taxable based on those answers and entries.  Your alternative is to not enter the refund at all.  

In either case, if less than the full amount shows as taxable on your 1040, the IRS will eventually bill you for tax due on this amount because they do not look at prior year returns  in their system, and just send the bill out automatically if they receive a copy of the 1099-g reporting the refund.  

You can, when you receive that letter, respond in writing explaining the reason for not including the refund as income and include a copy of your 6251 from prior returns.

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1 Reply
Anita01
New Member

Can I handle this special case state refund 1099-G of $A without an over ride?

When you enter the state tax refund, Continue and you will be asked a few questions, including whether you want to calculate the portion taxable based on having paid AMT.  If you say Yes, you will be taken through a series of questions to determine if any of the state tax refund is taxable based on those answers and entries.  Your alternative is to not enter the refund at all.  

In either case, if less than the full amount shows as taxable on your 1040, the IRS will eventually bill you for tax due on this amount because they do not look at prior year returns  in their system, and just send the bill out automatically if they receive a copy of the 1099-g reporting the refund.  

You can, when you receive that letter, respond in writing explaining the reason for not including the refund as income and include a copy of your 6251 from prior returns.

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