On "State and Local Tax Refund Summary", TT shows the wrong refund amount for the state tax. It's too high, yet was brought forward from last year. What's going on?

[wsalopek]

We've been using TT for years, so how is TT getting that refund number wrong?  It's about triple the amount...too high.

[MaryM428]

This has been a known issue for some users of TurboTax.  

Here are the steps to correct it:

 

1. Go to Federal
2. Wages and Income
3. Other Common Income
4. Refunds Received for State/Local Tax Returns
5. Revisit
6. Delete the entry there
7. Enter your state refund 1099-G again.

If all three of the following are true, your refund counts as taxable income:

• You itemized deductions last year, instead of taking the standard deduction
• You claimed state and local income taxes (not general sales taxes)
• Claiming the deduction helped you increase your federal refund or lower your tax bill

[SteamTrain]

.......and make sure yo get your actual state refund 1099-G too to use.  That will be the correct number

Triple is a fudgy number too   $30 vs $10?  $75 vs $25?  $7500 vs $2500.

____________________

IF you don't use the 1099-G state refund form $$number , and calculate the refund number yourself? ….What you got back into your pocket is not always the proper refund amount to be used.

1) Pre-refund, State Check-off donations that reduced the refund, have to be added back.

2) Use-Tax assessments that reduced the refund...have to be added back.

3)  IF you let the state keep some of the 2019 refund to be applied against 2020 state taxes...you add those back in too. (But then that amount ends up as a separate state tax deduction in 2020...so it balances out )

[user82936234]

Okay, I'm very confused. 

I am in the same situation as the thread starter. I've been using TT for many years and actually I don't even recall seeing this screen or being asked about it. 

Looking at the forum, there appear to be A LOT of people asking this question and I see a lot of conflicting answers with no input from anyone from Turbotax either. 

I have the same situation, the amount filled in automatically by TT is several thousand dollars HIGHER than the amount that was actually refunded. I checked my 2019 state tax return and I can't seem to figure out where TT is getting this number from or who it's being calculated. 

I have very simple tax returns as well. No charity donations, standard deduction and a few 1099-INTs. The state return looks quite boring. So I don't understand why these numbers don't match up (nor do I understand why this is the first time I am ever seeing this screen or confusion after using TT for many years). 

Some people are stating that you should leave as is, others state that you should use some form to calculate it, and others say to delete the entry as its a known issue and to reinput the numbers. Even on this thread, we have slightly conflicting answers for the solution. 

What should we do? Is this a known issue/bug, or is it calculating something in the backend that we just don't see (and if so, I don't know why its being presented in this way as it appears to be confusing the heck out of a lot of people). 

Also, I went ahead and edited the number to see what happens to the Fed/State refund amounts and nothing changes. So is this data even being used in any calculation? Should I just leave it as is and ignore it. I mean, as long as I finish the taxes and go back in and edit that field and don't see an increase/decrease in taxes owed, I guess I can just leave whatever bulls*&# number TT has put in there. 

Advice?

[MtMoriah]

I see this same issue every year, too.  I'm pretty sure I've seen it for several years.  For me, TurboTax usually recalls a lower number.  I go to my checkbook register, note the amount of the direct deposit from my State, and then enter that value.  Again, what I enter manually is higher than what TT recalls.  

So much about TT seems fantastic, why can't they fix this glitch?

It's also a really nebulous thing to "search" for.  Took me a long time to find this thread, but lo and behold, others have the same issue! 

[Katherine S 63]

Taxpayers who itemize their deductions on their federal income tax returns and receive a state tax refund must include the refund in income only if they deducted the state tax paid. Because of the $10,000 limit on itemized deductions for state income and property taxes, some itemizers are not able to deduct all of the state taxes they paid and do not need to include a refund in income.

This is coming from :  https://www.irs.gov/newsroom/irs-issues-guidance-on-state-tax-payments#:~:text=Most%20taxpayers%20re....

I believe that the software calculates what would have been allowed for deduction if the taxpayer would have itemized or did itemize so the number is correct.