topic State and Local Tax Refund Summary does not match refund from prior year in After you file

State and Local Tax Refund Summary does not match refund from prior year

jjkneeshaw — Thu, 15 Feb 2024 22:22:10 GMT

The state and local tax refund summary correctly listed New York and tax year 2022 but the refund amount Turbotax ceded was less than the actual refund reported on the State Tax last year. This also happened in prior years with Turbotax. How does Turbotax calculate that amount and why is it different?

Re: State and Local Tax Refund Summary does not match refund from prior year

DawnC — Thu, 15 Feb 2024 22:39:02 GMT

If all three of the following are true, your refund counts as taxable income:

You itemized deductions last year, instead of taking the standard deduction.
You claimed state and local income taxes (not general sales taxes).
Claiming the deduction helped you increase your federal refund or lower your tax bill.

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill.

Whether or not your state income tax refund is taxable on your federal income tax return depends on whether you took an itemized deduction (Schedule A (Form 1040)) for the tax that was later refunded.

Don't report any of the refund as income if you didn’t itemize your deductions on your federal tax return for the tax year that generated the refund.
If you took an itemized deduction in an earlier year for taxes paid that were later refunded, you may have to include all or part of the refund as income on your tax return. Use Worksheet 2, Recoveries of Itemized Deductions in Publication 525, Taxable and Nontaxable Income to determine the taxable amount of your state or local refunds to report on your tax return.

Re: State and Local Tax Refund Summary does not match refund from prior year

jjkneeshaw — Sat, 17 Feb 2024 23:26:12 GMT

Thank you for the detailed answer. It explained a lot. But I am still unclear about how TurboTax calculated the state and local tax refund if I took the standard deduction. It is always less than the actual refund I received. What is being subtracted out?

Re: State and Local Tax Refund Summary does not match refund from prior year

CatinaT1 — Thu, 22 Feb 2024 22:28:50 GMT

This FAQ might help: Do I need to report the state or local refund I got last year? Is it taxable?

Your state and local refunds are only taxable if you itemized the year before. It might not all be taxable, it depends on how much your itemized deductions were the year before.

Re: State and Local Tax Refund Summary does not match refund from prior year

lek4g92 — Thu, 04 Apr 2024 19:37:00 GMT

Same thing is happening to me in the current Federal Tax Prep. I did not itemize last year. The filing was pretty straight forward. My actual State refund was much larger than the figure that is being reported in the current State and Local Tax Refund Summary for last year. And the amount I received matches the Refund value that was calculated and filed using TurboTax. So, why is it so much smaller than the actual amount I received. Wouldn't last year's filed refund calculation carry over. I don't know if I should change the figure provided to the actual larger amount I received. It's a little concerning.

Re: State and Local Tax Refund Summary does not match refund from prior year

CatinaT1 — Thu, 04 Apr 2024 20:07:19 GMT

See the FAQ I posted earlier.

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill.