State/Local "Refund Amount" defaults to another number - why? Should I overwrite this?

[Cristina3]

Hi, In the prior year's filing, I got a State/Local tax Refund.  And in the current filing, TurboTax asks for this Total Refund amount.  I actually used TurboTax last year...and so TurboTax has last year's info, including the Total Refund amount.  I checked the "Two Year Comp" page (under the state-section) and it shows last years refund and other state tax info from last year.  But on the screen where I'm supposed to enter the Total Refund amount, Turbo Tax has another number in there by default.   I can see that this number is last year's Total Refund less another number listed on the Two Year Summary page.  I don't understand why.  Should I overwrite this number with the Total Refund number?  Normally I would leave whatever TurboTax put in there by default.....but it doesn't seem correct to have a calculated number in a field called "Total Refund".   I double checked - the refund on last year's return matched what was direct deposited into my bank account....so it's correct.  But for some reason TurboTax is adjusting the number. 

I see that others had this same question in the attached post -- but it is from a few months ago and no one ever answered the question....so I decided to create a new post.  I hope someone can help.  This is my last issue to resolve before I can finally file this thing.....thanks in advance 🙂 

  https://ttlc.intuit.com/community/state-taxes/discussion/what-is-the-state-and-local-tax-refund-summ...

[Anonymous]

the IRS has its way of computing the taxable portion of a state refund.    the refund is prorated over the taxes you paid in 2018 and the taxes you paid for 2018 in 2019. let's say you paid $2000 in state taxes for 2018.  $1500 in 2018 and $500 in 2019  and got a $200 refund.   the proration would result in a refund from 2018 of $150 

1500/2000= 75% times 200 = $150.  the other $50 reduces the taxes you paid in 2019 for 2018 so if that were the only amount of state income taxes paid schedule A would only show $450.  there should be a state tax refund worksheet among the various forms.   in addition, the refund would not be taxable if you dd not itemize in 2018, were in alternative minimum tax that year in some cases. there is even a hypothetical calculation of sales taxes to see if the refund is taxable.   DO NOT OVERRIDE. 

[Cristina3]

Thanks - I checked the state tax refund worksheet and it didn't show the calculation.  It just lists this calculated number in the Total Refund field.  But looking at the state Two Year Comparison form, I can see that the calculation being done for the Total Refund number is (Total Refund - Refundable Credits)....that gets to the number TurboTax is putting by default into the Total Refund field.    Maybe those "refundable credits" line reflects the prorated calculation that you describe.  I don't know.  But given the number that TurboTax puts there by default is logical (though mislabeled....as it is not the Total Refund from the prior year)...I'll do as you say and not overwrite it.  I'll leave it as-is.    Again - thanks for responding.  Hopefully in next year's TurboTax they can add a "Learn More" link next to the field explaining their calculation.  

[user82936234]

We are seeing the same issue on TT 2020, so although I see several people commenting that it's a known issue, I don't see how it can still be an issue/bug in the following year's tax software as well.