Wisconsin Schedule SB state refund subtraction

[StarGirl18]

I did not itemize deductions on the Federal Return.  Took the standard deduction.  Can I still subtract my Wis State Refund on Schedule SB on the Wisconsin Return?  Turbo Tax did not, is that a mistake?

[JohnW152]

Yes, you can. 

However, your refund of state and local income taxes will be included on Line 1 of Schedule SB only if it was included on line 1 of federal Schedule 1 (Form 1040). 

It's possible that your state refund wasn't taxable on your federal return. 

If all three of the following are true, your state or local tax refund will be included as taxable income on your federal return:

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

[StarGirl18]

Ok, thank you. It doesn't make much sense to me.  I assume the Fed standard deduction was arrived at somehow to include an average of all state taxes.  Any idea how the Feds arrive at that standard deduction?   I can see adding the state refund to Schedule 1 being mandatory, if you want to deduct the refund on your state taxes, but in my mind, it shouldn't matter whether you itemize or take the standard deduction. 

[JohnW152]

No, the federal standard deduction isn't affected by anything on your state returns.  It's a set dollar amount that's based on your filing status and age. 

You can find your tax year 2022 standard deduction amount in the TurboTax Help article What's my standard deduction for 2022?.

Itemizing deductions, on the other hand, allows you to list (itemize) individual deductions on Schedule A.  If the itemized deductions on Schedule A are greater than your standard deduction, the TurboTax program will use the itemized deductions, rather than your standard deduction, to lower your tax bill. 

After you've completed the Deductions & Credits section in the program, TurboTax will let you know which of these deductions gives you the larger tax break.

[Stllwtrs]

It doesn't make sense to me either, it is a computerized form, which could fix it, instead of leaving it blank. It doesn't offer you an option of how to solve it....