Taxation of 2021 Georgia Refund

[crdwozan]

It appears IRS has recently addressed taxation of 2021 State of Georgia Refunds by saying: "

If the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit (for example, because the $10,000 tax deduction limit applied) the payment is not included in income for federal tax purposes.

Payments from the following states in 2022 fall in this category and will be excluded from income for federal tax purposes unless the recipient received a tax benefit in the year the taxes were deducted.

• Georgia"

First, I do not understand this statement.

Second, I have entered my data in TurboTax Premier and received the following response, "It turns out part of your 2021 refund is taxable... Baded on what you told us $1,772 from your 2021 state tax refund is taxable on this year's federal return." 

QUESTION; Since IRS has just released this is Turbotax Premier up-to-date and making a correct determination or should I wait for a software update before filing my taxes.

Thank you,

Richard 

[Critter-3]

The rule you are quoting is right off the IRS instructions for the form 1040 which have been around forever, this is nothing new. And the program will calculate how much of the state refund is taxable based on the schedule A SALT limitations. Save a PDF of the return with all the worksheets and look at the state refund calculation worksheet if you want to see how the program came up with that amount.