How do you enter multiple same-state tax refunds received in 2019 for prior tax years, one itemized, others not

[kamull01]

BACKGROUND:

After filing my 2018 federal and state returns, I discovered a provision in my state tax code whereby a portion of my pension from a state educational institution was non-taxable.  That led me, in 2019, to file amended STATE returns for tax-year 2014, 2015, 2016, 2017, and 2018.  [Because there was no change in my federal tax due and no change in the federal refund due because the amending changes only affected the STATE tax due, I filed no amended FEDERAL returns for these five years.]  As a consequence, instead of owing state taxes as indicated in the original returns for those tax years, after filing the amended state returns in 2019, I ended up with state refunds for each tax year.

2019 TT QUESTION:

I have reached the section for state refunds and am at the page with the title “Did you have any of these types of income,” below which is listed as an example  “--state and local tax refunds received in 2019.”

I clicked on the informational link “When would my state or local tax refund count as income” and I read this: “Your state or local tax refund received in 2019 could count as income if you itemized your deductions in 2018. If you did this, your 2018 tax return would have a Schedule A. If your return doesn't have a Schedule A, then your state or local tax refund won't count as income.”

I did not itemize in both the 2018 federal and state returns and there is no Schedule A.  Does the information in the link mean that all five state refunds that I received in 2019 are not taxable?  Or does the information in the link apply only to the state refund that I received in 2019 for my tax year 2018 state return?

If the information in the link applies only to my tax-year 2018 state refund, since I itemized in tax-year 2016 and I did not in the other years, I am wondering how I indicate that 2016 was a tax year in which I itemized, while at the same time indicating that 2014, 2015, and 2017 were tax years in which I did NOT itemize, and also at the same time answering the question about the 2018 tax-year refund, for which I also did not itemize.

Or do I answer the first question which is about tax-year 2018, indicating that I did not itemize that year, and then click on the button “Add another State or Local Tax Refund” only one time to enter the refund for the 2016 tax year, the only year in which I itemized, in other words, not entering anything about the non-itemizing years 2014, 2015, and 2017??

[Carl]

It's simpler/easier to just indicate that you *did* itemize in 2018. Then add together the refund amounts *only* for the tax years you did itemize, and enter that total on your 2019 return.

Your way as per your last paragraph works too. But that seems like going around your elbow to get to your thumb. The end result is the same.

[kamull01]

@Carl:  I've got 2018 listed (and answered "no itemization" to that question for that year) ... listed and answered that way because that section automatically comes up when you answer "yes" to the question "“Did you have any of these types of income,” below which is listed as an example “--state and local tax refunds received in 2019.”

Then after clicking on the “Add another State or Local Tax Refund," I added the year for which I did itemize.   When I clicked the button to add the tax-year refunds in which I did not itemize, they were treated as taxable, so I deleted them and left only 2018 (for which it was already recorded as not itemized) and the 2016 year (for which it was treated as itemized).     I had already figured out by hand how much the IRS was due or not due and the TT final amount ended up being the same when only 2018 and 2016 were entered. 

I understand that the state issues 1099-Gs only for refunds when there is itemization in the tax-year ( and sends a copy of it to the IRS).  I am hoping that that is true and that I receive only one 1099-G, which means that the IRS will have only a record of one 1099-G, too.  (I'm going to e-mail my state revenue cabinet to check that out.)

[kamull01]

@Carl: addendum -- in other words, the only satisfactory solution WAS to go around my elbow to reach my thumb.  This is because question "“Did you have any of these types of income,” below which is listed as an example “--state and local tax refunds received in 2019” is the route I took to get into this income topic in the first place.  This is because I was letting TT introduce all of the income topics, one by one-- i.e., TT made me go around my elbow.

[Carl]

the only satisfactory solution WAS to go around my elbow to reach my thumb.

That's no surprise. What matters is that the end result is right. Many times, programming limitations force you to take the long route.

[Nwesu]

If I have multiple same state refunds received in 2019 for prior years for which I itemized, what "Total of all your payments and withholding" amount should be entered for each year after the first one, which was filled in by TT?

[EMCxC]

I have  a similar issue in 2020, receiving refunds for 2019, 2018, and 2017.  Except none of them should be taxable because I didn't itemize in 2019 and in 2018 and 2017, I itemized but took the sale tax deduction instead of the State Tax deduction.     So California did issue  1099-Gs in 2020 for refunds in 2018 and 2017.  And I have to indicate that they are not taxable.   It will not work if you put in 2019 first, it will only ask you about 2019.  So  I put in 2018 and 2017 first and it asked what part of the refunds were taxable and I put in zero.   Then I went back and updated the State Refund part, adding the 2019 refund and it worked fine.

It took me awhile to figure this "need to put the older ones iin first, as I did have 1099-Gs for these years and couldn't reach around my elbow, but I kept trying as these posts made me hope it COULD be done, somehow.      I hope this helps someone else.

[VolvoGirl]

If you know the state refund won't be taxable like because you took the Standard Deduction or sales tax deduction in the prior year then you don't need to enter the 1099G refund at all.  Just skip them.  Problem solved.

[EMCxC]

Yes, I agree that that is a solution since this income is not taxable and the tax code said you must include 1099Gs for all taxable income,.  However, with computerized matching, the IRS does try to match 1099s they receive  with entries on the corresponding tax return and my experience says that  if the computer flags a 1099 as unmatched, and a human need to review the return,  it can take more than a year to resolve.   So, as you point out, my advice is not legally needed but having had to deal with the IRS on something similar (hence the refunds for 2017, and 2018 in 2020)  I would recommend adding all 1099s  that are in your IRS account.

[VolvoGirl]

If you use Turbo Tax and enter a 1099G that is not needed then it does not get sent with your return at all so there is nothing to match to the IRS.   I wouldn't worry about that.

[Mike9241]

don't think the IRS tries to match state tax refunds with 1099-G's. first, if it's nontaxable it will not show up ANYWHERE on the 1040 - NO SCHEDULE - NOTHING.  You'll note that line 1 of schedule 1 only says enter "taxable refunds". there's no way to tell the IRS that a particular year's refund is nontaxable.  even if you itemized the refund might not be taxable because you paid Alternative Minimum Tax.  When I prepared returns as a professional, I only reported taxable refunds and in decades my clients never got an inquiry. 

your way would require making them taxable so they how up on schedule 1 line 1 and then take a subtraction on schedule 1 line 8. this could prompt an IRS inquiry