How do I use Turbo Tax to report a state tax refund received the same year as the overpayment?

[JMike]

We sold a condo in Hawaii in October, 2016.  As non-residents we had to pay estimated capital gains tax at the time of closing.  The estimate was too high and the state refunded the overpayment in December, 2016.  The State of Hawaii sent a 1099-G for the refunds.  However, when I tried to enter the information on the 1099-G, Turbo Tax insisted on applying it to 2015, not 2016.  There is no option to report a state refund for the same year of the overpayment.  How do we post a state tax refund received the same year as the overpayment?

[IsabellaG · Accepted solution]

You don't have to do that if you don't claim the tax on your 2016 return. Since you are preparing the return now, don't deduct the tax paid, and you won't have to report the refund.

It seems as if you must report every 1099-G that you receive, but state refunds are only taxable if you deducted the tax in a prior year and got a tax benefit from the deduction. This doesn't pertain to you.

[avandaver]

Why did my husband get a 1099 G for last year from state since we file jointhy