I am doing my 2023 taxes today with Turbo Tax and entered my 2022 Virginia State Tax Refund amount (from Form 1099-G) as income, a few steps later the App informs me "Your state and local tax refunds are not taxable." Ostensibly for Federal Income Tax purposes.
Subsequently, I move on to my Virginia State Return. I enter the same amount of my state refund for TY 2022 (Form 1099-G) in the Income section. At some point, the App notifies me that the: VA portion of Federal AGI should not be more than Federal amount ..." and presents me with Form 760PY. I observe that the amounts in Column 1 and Column 2 (**bleep**I) on line number 2, of the Itemized Deduction Allocation Worksheet, are in variance by the refund amount that TurboTax told me wasn't taxable for my Federal return.
How can I reconcile this and proceed?