1099-G

[Gcarlin1207]

The state Of Michigan sent me a 1099-G for a refund of $3329 from my original State tax submission (2022 calendar year taxes refundable in 2023). I then had to file an amended return because my broker mis-calculated my foreign tax paid on an investment. The correction resulted in me having to pay $13 dollars back to the state in 2023 for 2022 tax liability. Turbo tax Picked up the true amount of my total refund ($3316) but the 1099-G form does not reflect the correct amount, instead it says $3329. 

Which number do I use, and if I have to use the incorrect higher number $3329, where do I pick up the $13.00 I paid to the state on last years amended form?

Can I use the suggested Turbo Tax entry of $3316 and not worry about the form not reflecting the net amount of my State tax refund last year?  I am a little puzzled. Do not feel $13 is worth having an audit because a form does not match the IRS records.  Please advise????

[KrisD15]

First of all, if you Took the Standard Deduction (rather than Itemized)  on your 2022 tax year federal return, the state refund is not taxable and needn't be entered at all. 

If you did itemize, and now may need to claim that refund, or part of that refund, you have a choice of entering the proper amount into the program, or the amount shown on the 1099-G and then adjusting. (Deductions & Credits; Estimates and Other taxes Paid; Other Income Taxes; Other Income Taxes Paid in 2023) 

Please be sure that the additional amount is tax only and not penalty and/or interest. 

[Edited 01/29/2024 I 8:50am PST]

@Gcarlin1207 

[Gcarlin1207]

Please read your response carefully, it says if I itemized deductions, ignore the 1099-G, then you say if I itemized deductions, I have to be careful and do certain things without including penalty assessments..

???? Confusing to me more than ever.

[KrisD15]

Yes, thank you. 

The correction was made, if you used the Standard Deduction on your 2022 Federal Return, you would not have claimed State taxes Paid. (there would be no Schedule A)

If you don't claim State Taxes Paid, you needn't claim State taxes refunded the following year.