How can I handle receiving state refunds for 2013,14,15 all in 2017. TT wants to apply the refunds on 1040 line 10 each year instead of in 2017.

[winsall]

I filed 2013,2014,2015 all in 2017.  I completed them in order and imported each time. unfortunately, I also told TT to carry forward the refunds thinking I would request them all with my 2016 filing.  Federal paid me 2013 and carried 2014 and 2015 forward.  State paid me all three refunds in 2017.  I now realize that Turbotax added the state refunds to line 10 of 1040 each year and in fact applied them cumulatively.   Consequently, in 2016 TT, the State and Local Tax Worksheet has imported a refund amount that is the sum of the three (2013,2014,2015) state refunds I received in 2017.  Although I believe you can deduct state taxes on Schedule A each year, I dont believe I should be taking these refunds as income each year.  They should be applied to my 2017 return.  How can I edit the imported data to correct this so I can amend my 2014 and 2015 taxes and complete 2016 accurately?  Is there somewhere to indicate I paid tax but didnt receive the refund until a particular future year?   

[SweetieJean]

Didn't you post this Q already?

[winsall]

Actually I posted in a reply to someone else's similar question hoping for clarification of a previous answer.  Rather than hijack that old question, I decided to submit my own question in hopes of getting an answer.  Thanks for any help.

[winsall]

I think I figured it out.  For each of the years 2014,2015,2016 I removed the state tax refund amount from the State and Local Tax Worksheet, edited Schedule A to reflect the actual state withholding from the w2 in the tax year (instead of a cumulative amount of the previous refunds and the w2 amount) and also removed the Estimated Payments.  This adjusted my AGI lower as well as adjusting my Itemized Deductions lower by the amount of the state taxes received in the previous years.  This means my AGI changed but not my Taxable income or my tax liability.  I may not even need to file amended returns since my tax liability did not change.  Once I do 2017 taxes, I will have to report the 4 years (2013-2016) of refunds on Line 10.  If you want to support filing older taxes in a year later than the following year, the import feature should check the year the refunds were received instead of assuming it is received in the immediate following year.  As far as I can tell, the program would be able to handle everything by verifying when the state refunds were received.

[Opus 17]

If you run the program in automated mode (answer all the questions in order) there will be a question about "We show you received a state refund of $X. Is this correct?"  If you pick and choose which sections to work on, you have to manually go to the state refund section on the income and credits page and run that section.

[Opus 17]

I don't quite understand why your refund amounts don't change. Your state refund is only taxable if you received a tax benefit from deducting state income tax on the previous year.   If your itemized deductions are less than the standard deduction, then your state refund is never taxable anyway.  It sounds like maybe you used the standard deduction for those years?

If you already filed, you should not change your tax data file, it should reflect what was actually filed, in case the IRS has any issues or you need to amend.

For your 2017 tax return, you will go to the section on "1099-G, taxable refunds and other government payments" (I think it's call that or something similar) on the Wages and Income section and run that interview.  You will be asked to double-check your state refund amount.  You can correct it here to reflect the total amount of refunds actually received in 2017.  The program will then ask some questions to determine if the refunds are taxable.

Note that the program is not designed to understand multi-year refunds and may get the answers wrong.

No matter when you received the refund for your 2013 tax return, the refund is only taxable on your federal return if you itemized your deductions in 2013 and received a tax benefit from the deduction (in other words, you took the itemized deduction and your itemized deduction after subtracting the refund would still be more than the standard deduction.)

The same calculation must be performed each year.  Your 2014 return is only taxable now, if you itemized your deductions on your 2014 return.  And so on.

If you used the standard deduction for those years, the best thing may be to just completely leave off or zero out the entry for past tax refunds, since you know they aren't taxable now.  Or if some are taxable and some aren't, you will want to only enter the ones that are taxable and tell the program to just include them as income without doing the calculation; and leave off the non-taxable refunds since the calculation is not sophisticated enough to understand.

[winsall]

I did itemize all of the years and received a tax benefit each year so my returns are taxable.  I was able to remove the state tax refunds on the State and Local Tax worksheet and also adjust the cumulative amounts of my refunds on Schedule A.  My perfect storm came from applying all my old refunds to the next year.  The program carries the refund amounts forward each year but assumes each year that you are getting the refund in the following year not continuing to carry it forward for multiple years.  I still think there is a bug that could be addressed that would allow a person to do what I did but I also agree that the program is probably not designed to do 4 years of old taxes in a row.  Thanks so much for all those who made an effort to help.