Can I deduct less state income tax than I paid?

[dbx227]

I had a lot more state income tax withheld than I will owe this year. I am itemizing and I would like to take a deduction for smaller amount that I will actually owe rather than the amount withheld, to avoid having to declare  the large refund as income next year.

Can I do this?

[Mike9241]

taxes are capped at $10,000 for 2018 to 2025

if the extra deduction will not produce a federal tax benefit (you owe less federal taxes), then it will be nontaxable in 2022. also long ago before the above tax law change, there was a Supreme Court tax case where to avoid the Alternative Minimum Tax taxpayers deducted less than the amount they paid for real estate taxes on schedule A. SCOTUS said for AMT they had to take the full amount into account.

your case is slightly different unless the full deduction would result in AMT. 

also since the state withholding transfers from the w-2 to Schedule A automatically, you will have to override.  this will prevent e-filing and void Turbotax accuracy guarantee.

[dbx227]

I withheld $8K and will owe about $2K. All I want to know is if I can deduct $2K rather than $8K. I am not subject to AMT. Can I manually override the $8K that TurboTax puts in and not declare my refund in 2022?