How to report a state tax refund because employer withheld taxes for the wrong state? We have a Form 1099-G refund, but also had to pay the right state. How report that?

[careyarroyospin]

If I report the refund from the 1099-G, then it won't reflect the actual payment to the right state unless I find a way to also report that. 

[SteamTrain]

You still report the state refund on the income page.  Whether it gets taxable or not depends on whether you itemized deductions last year, and if you did itemize, if the $10,000 SALT was exceeded as part of those deductions, then part or all of the state refund will not be included in Federal income.  If you used the Std Deduction last year, then the state refund you enter is not added to Federal income.

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In the end, IF it is included in Federal income for 2022 Federal taxes, then that refund may be offset by  Balance Due you had to pay to the proper state.  The Balance Due you paid for 2021 state taxes, is then entered in the Deductions&Credits page.  Down in the Estimates and Other taxes paid section, in that section, there is a menu selection for Other Taxes Paid.....you go in there and find a menu line for Balance due on your 2021 taxes paid in 2022. 

[KrisD15]

First of all, if this was a refund you received in 2022, it depends on whether you took the Standard Deduction or Itemized on your 2021 Tax Year Federal return. 

If you took the Standard Deduction, state refunds are not reported. 

If you itemized, some or all the refund may be taxable. 

If you paid state tax in 2022, enter that under

Deductions & Credits

Scroll down to "Estimates and Other Taxes Paid" and select Start next to "Other Income Taxes"

Scroll down to "Balance due on your 2021 state taxes paid in 2022" and select Start

[careyarroyospin]

That works! Many thanks