Income Tax Adjustment

[BillEngr]

I don't understand what goes into providing the requested Income Tax Adjustment value. TurboTax says "include all Connecticut income tax deducted on your federal income tax return except that deducted on federal Form 1040, Schedule A".  I had entered into TurboTax the Schedule A type of items including my Medical/Dental Expenses, Taxes Paid (State/local income, state/local real estate, and personal property) which were capped at $10,000, Interest paid, gifts to charity, and the grand total itemized deductions did not exceed the Standard Deduction so the Standard Deduction was used. As such, TurboTax is not filing Schedule A, Itemized Deductions.  Since the Standard Deduction was selected for use (instead of itemized deductions), I assume none of my Connecticut income tax withholding (from Connecticut W-2 earned income and Pension) was deducted on my federal income tax return, and the Income Tax Adjustment entry for this window should be zero? Is it also true that had my itemized deductions been greater than the Standard Deduction and I opted to use itemized, the CT W-2 and Pension withholding amounts would also be excluded from entry into this window?  So I don't understand what CT income tax would have been deducted from my federal income tax that was not included in Schedule A (if itemized). Please advise so I can understand. Thanks. 

[MaryK4]

That is correct- since you did not itemize deductions there is no Income Tax Adjustment value.  This would apply in situations for people who do itemize and capped the $10,000 tax deductions- the best tax strategy is to use a little state income tax as possible.

[DER9]

The answer is still very confusing, please clarify.  If we use the itemized deductions, do we need to add the CT Tax withholding amounts from the W-2 back?

[BillM223]

"do we need to add the CT Tax withholding amounts from the W-2 back?" - no

"The answer is still very confusing, please clarify." - yes, it is confusing. The state of Connecticut starts with the federal AGI - Adjusted Gross Income. However, this number may contain some Connecticut tax that you have deducted on the federal real. Connecticut does not want you to leave that deduction in the AGI in the state return, UNLESS that state tax was in Itemized Deductions (Schedule A) (which they specifically allow). As the example says (in the Learn More in TurboTax), if you you deducted any state income tax on your Schedule C (self-employed), you would need to add that back to the AGI.

Really, this does not apply to most taxpayers, so if you haven't paid any CT state income tax for any reason besides to go on Schedule A, this does not concern you.

[danilol]

I have the same question and confusing.  How can people know whether they have deducted connecticut income tax from federal return?

I live and work in CT. I only have  W2 for the year of 2023. I  take standard deduction.

What exactly should I  be looking for   on my W2? Certain boxes on W2 to indicate this? Or any form I will receive?

Thanks

[AmyC]

Since you took the standard deduction, you are not deducting state and local taxes from itemizing. You are not self-employed deducting any state tax, you have no adjustment, nothing to add or subtract, nothing to do as you have no income adjustment needed.

@danilol 

[danilol]

Thank you.