State tax due 2017

[PL76079]

I put 2017 NJ state due $6400 to the box labelled as "Balance due of 2017state tax paid in 2018". It only reduced my federal tax this year by $13. Did I do something wrong?

[hbl3973 · Accepted solution]

While we cannot see your return, the chances are that you got hit by the tax law change that limited itemized deductions of state+local+property taxes to $10,000.  NY, NJ, CA in particular were punished in this respect.

[PL76079]

Thank you very much. Your answer is very helpful. Can I ask one more question? What should I put on line10 of schedule1 of my 2018tax? My NY refund subtracted by NJ due of 2017? If just NY refund, that is not fair. In reality, I did not get that much refund last year because of these two states filing.

[hbl3973]

I'm not 100% clear about your facts. I think you are saying you got a NY refund and had to pay NJ.  The principle is that if you itemized in 2017 you would have had to include any NY and NJ income tax payments made during 2017 on your Schedule A.  Getting a state or local refund means you effectively subtracted too much state and local tax from your 2017 income.  The tax code adjusts for this by adding the over-itemization amount back into 2018 income.  (There is a special case if removing the refund from 2017 would have made the standard deduction larger.)  Bottom line, I would add the amounts on any forms 1099-G you received for what to enter on Schedule 1, line 10.