On my Federal 1040/Sched A, How can I claim LESS state withholding tax than my W2 indicates?

[rog314]

Maryland State Income Tax requires we subtract claimed State income tax withholding from the itemized deductions we carry over from the Fed/Sched A. Since my Sched A State Income/property tax is capped, I will be subtracting too much from my itemized deductions for the state return.  (the State's tax process does not take into account the Fed Cap with the new Fed Tax law). I would like to NOT claim as much as I'm allowed to on the Sched A/State Income section (line 5a). Because of the $10k cap, it will make No Difference on my Fed tax liability, but will counter-intuitively make a huge difference on my State liability.

[ChrystalM · Accepted solution]

TurboTax does this calculation for you. The program is using the limited federal deduction (eg, 10K/5K) minus real estate taxes to determine the state and local income taxes subtracted from federal itemized deductions (502, line 17b or 505, line 26c). The add back will be limited to only the portion of state income tax that was actually deducted on the federal return. 

[rog314]

I might believe that happens with the TT state return, but I am filing directly With the State (not using TT state for MD), and they ask what i am claiming on the Sched A. I need to have a sched A that matches what i enter on 17b of the state form (and yes, the state form calculation is wrong because it ignores $10k cap!) TT does this behind the scenes. Sounds like i need to do the same thing!