I chose to apply my 2017 California state tax refund to 2018 estimated tax payment and did not get an actual refund payment. Why did I get a 1099G from the state?

[jeffreyql]

Is my 2017 California state tax refund applied to 2018 estimated tax payment taxable as federal income?

[MichaelL1 · Accepted solution]

The amount is what could have been refunded to you (and then you turn around and pay it back in an estimated payment).

The State payments made (including the amount applied from 2017) are considered a payment made in 2018 for tax purposes.

A little confusing I agree, but it is correct.

[jeffreyql]

So it the amount taxable as federal or state income in 2018? I didn't actually get the refund? Thx

[MichaelL1]

If you itemized on the 2017 return and the state taxes paid were deducted, then the amount of the refund (in your case you chose to apply to 2018) would be taxable income on the 2018 Federal return.  If you did not itemize in 2017, then it is not taxable income in 2018.  When you enter the 1099G in TurboTax, the program will walk you through to determine if it is taxable or not to you.

[fanfare]

nice try but you can't hide your refund by holding it over for the next tax return.