I paid my SC state tax double last year. I paid my 2016 dues twice. They refunded me quickly, they are send me a 1099-g/int for the refund. Where do I enter this in TT

[Anita01 · Accepted solution]

If you received the refund in 2017, and thy are sending you a 1099-g that shows 2017 as when they sent you the money, you would enter this under income, the 1099-G section.  If you did not itemize your expenses on a schedule A in 2016, or you itemized and chose to take the state sales tax deduction instead of the state income tax deduction, this money will not be taxable to you.

Make sure you enter the state tax you paid during 2017 under Deductions and Credits, Taxes Paid.

[ernsttanaka]

i did as TTAnita said but - the refund is still added as income to my federal 2017 return.

[Anita01]

It should be added as income unless you said you did not itemize in 2016 or that you took the sales tax deduction.  The reason you enter it in as tax paid in 2017 is because it is then used as an itemized deduction on your 2017 schedule A.  That's how it is balanced out.  It is income to you but your itemized deduction for state tax paid in 2017 increases and, being part of your itemized deductions, it lowers your adjusted gross Income before taxes are calculated.

[ernsttanaka]

I paid double, deducted in prior year only once. So I was paid refund, But IMO refund should be tax neutral.

[Anita01]

Sorry, but it's not regarded that way by The IRS.  That's why you you should add it as state tax paid in 2017, assuming you paid it after or with your 2017 state return.  If you paid both the original amount due with your state return plus the excess in 2017, then the deduction can create a neutral effect on your tax owed.