Don't believe determination that my state tax refund is not taxable

[wingzytax]

Received a refund of our state taxes last year.  Itemized deductions. Expected that this year -- like in all previous years -- our state tax refund would be taxable.  Checked the box saying we'd itemized deductions - that we did not use the standard deduction - and the determination came back that our refund is NOT taxable.  I find it hard to believe.  Is this an error in the software? Or are there other factors that influence this determination?  Yes -- the amount of taxes we paid the state exceeded -- by quite a margin -- the $10,000 cap. I'm nervous.  Don't want to assume our refund will not be taxable .. file and then discover down the road that it should have been.  And that there was an error in TurboTax.. that the software mis-interpreted my "I itemized deductions" as "I claimed the standard deduction".  Thanks!

[KurtL1 · Accepted solution]

We cannot see your 2018 tax return but if your total taxes less the amount of your state refund still exceeded the $10,000 limitation, the State Refund is not taxable on this year’s return. 

You only to pay taxes on the state refund if you deducted the state taxes on the 2018 return.

[wingzytax]

Thanks. Makes sense. Wondered if that might be the case. Our property taxes alone took us over the $10k cap.