On my Deductions and Credits summary, there is a negative number for State and Local Taxes greater than $10,000; how can this be?

[AnthonyC · Accepted solution]

Its the amount of your disallowed state and local income and property taxes.  Due to tax reform, there is a $10,000 maximum on the total amount of both of these deductions combined.  TurboTax is showing you the amount you are not able to claim with that negative number.  It's only for your reference - it doesn't get factored into the return.

[Skyrm]

" It's only for your reference - it doesn't get factored into the return." 

I am using Turbo Tax Deluxe 2020, and the negative number most certainly affected my return.  It was factored into my deduction total.  I believe that would affect my return also.

Why is that?

Thanks,

Steve S

[emilyg41]

Same issue! It is reducing my refund by half that of last year! Any solution ?

[Anonymous]

There isn't a solution - this is how it should function. 

The negative number is just part of the summary screen, showing you how much of your state and local tax entered isn't deductible.  The negative number itself doesn't go on your return, though you are right it essentially "factors" in because that amount of tax that you paid does not benefit you in anyway. 

The program is working as designed - you can't deduct that amount over $10,000 at all, that's just the law.  

[Skyrm]

The confusing part is Turbo Tax calls it "state and local tax", while it actually state and local taxes PLUS Real Estate Taxes.  Then the numbers add up. 

[Anonymous]

Real estate taxes are state and local taxes.   ??    

[MarilynG1]

@Anonymous Yes, Property Tax is included in the SALT deduction.

Click this link for more info on the SALT Deduction.