I am having the opposite problem. Turbo Tax is forcing me to report my 2018 refund in 2019 when I did not deduct that tax payment in 2018.
Basically, in 2018 I declared 18,000 in SALT deductions of which only 10,000 was deducted. I received a $5000 refund, which means I still have 12,000 in SALT deduction which is over the 10,000 number. So, I never deducted that $5000 refundable tax payment in the first place and therefore I should not be taxes on that refund according to this IRS clarification:
https://www.irs.gov/newsroom/with-new-salt-limit-irs-explains-tax-treatment-of-state-and-local-tax-r...
- In one example described in the ruling, a single taxpayer itemizes and claims deductions totaling $15,000 on the taxpayer’s 2018 federal income tax return. A total of $12,000 in state and local taxes is listed on the return, including state and local income taxes of $7,000. Because of the limit, however, the taxpayer’s SALT deduction is only $10,000. In 2019, the taxpayer receives a $750 refund of state income taxes paid in 2018, meaning the taxpayer’s actual 2018 state income tax liability was $6,250 ($7,000 paid minus $750 refund). Accordingly, the taxpayer’s 2018 SALT deduction would still have been $10,000, even if it had been figured based on the actual $6,250 state and local income tax liability for 2018. The taxpayer did not receive a tax benefit on the taxpayer’s 2018 federal income tax return from the taxpayer’s overpayment of state income tax in 2018. Thus, the taxpayer is not required to include the taxpayer’s 2019 state income tax refund on the taxpayer’s 2019 return.
Turbo tax did do it correctly until I went to file the taxes and then it forced me to hand enter the 5000 from the 1099-G into the schedule c during the check. Now won't let me remove it. This seems like a bug to me.
