Received refund from overpayment on 2022 taxes and received 2023 1099-INT for interest on overpayment, but did not receive interest on the refund and did not have any outstanding payments due. Was the missing interest credited toward my 2023 tax bill?

[chestnut]

Received refund from overpayment on 2022 taxes and received 2023 1099-INT for interest on overpayment, but did not receive interest on the refund and did not have any outstanding payments due. Was the missing interest credited toward my 2023 tax bill? 

[SusanY1]

The interest reported to you on the 1099 would have been included in the refund payment that you received.  

[chestnut]

I requested a specific refund amount.  I only got the specific refund amount.  I did not get the specific refund amount plus interest.  I had expected to be paid the refund amount plus interest.  So I need to subtract the interest from the specific refund amount and credit myself in Turbotax for the interest that was included in the refund amount that I had expected to be paid extra for?  How do I do that in Turbotax?  Thanks.   

[SusanY1 · Accepted solution]

Did you request a specific refund amount with the rest to be applied to the next year's return?  

There is no way to remove the interest that the IRS reported was paid or credited to you.   If part of your refund was allocated to any other purpose, the interest would be credited with it and is still taxable income to you in the year credited by the IRS.  

[chestnut]

Yes.  I had filed an extension, so I filed my 2022 return before October 15, 2023.  Since it was so late in 2023, I requested a specific refund amount with the rest to be applied to my 2023 return.  Turbotax thinks I got the full refund, not a refund less interest.  Thank you.

[chestnut]

To clarify my last response, Turbotax thinks I got the refund amount I requested, which was not my entire overpayment.  It does not realize that the specified refund amount includes interest paid by the IRS.  What do I do now?  Thank you.

[DianeW777]

You should be able to fix this with the correct amount that was applied to your 2023 tax return by using the steps below. This would be considered a first quarter estimated tax payment.

1. Sign into your TurboTax return
2. Under Federal select Deductions and Credits (left menu)
3. Select Estimates and Other Taxes Paid > Select Estimated Tax Payments
4. Select Federal estimated taxes for 2023  > Continue to Enter the amount you applied in the first quarter slot (if an amount is there make the right correction to it)

@chestnut