TurboTax is telling me I need to correct my state tax info (prior yr KC tax return amt =/= fed) but the amt matches in every instance, and was even prefilled. Workaround?

[jmw43290]

2021 KC tax refund listed as income on 2022 federal: $402
2021 KC tax refund listed as income on 2022 state: $402
2021 KC tax refund according to my 1099-G: $402

But TurboTax says if I don't make a correction I cannot e-file, because "Form MO-A: TP Kansas City/St. Louis Refund should not exceed the prior year state and local tax refund reported as taxable on your federal return."  What gives?

[RalphH1]

The Kansas City earnings tax part of the program has historically been a little touchy (see this conversation). And it’s difficult to have a troubleshooting process in this venue, but let me throw a few things out there (like #15 would do, even on one usable leg)…

As Bill said (in that link), if you used the “Standard Deduction” last year, then it’s definitely not taxable on this year’s return. So you could return to “State and Local Tax Refunds…” in the federal taxes section and just delete the KCMO 1099-G (as the IRS doesn’t even want to know about it in this case). Then you’d want to edit your state return and look for the “Kansas City/St. Louis Tax Refund for 2021” page, where you would change the $402 you’d probably be seeing to a zero. (This is very important, as you’d otherwise be getting a deduction on your Missouri return to which you’re not entitled…)

If you did itemize last year, you can’t do it that way and leave it, of course. But you could delete the 1099-G and re-enter it in the federal section, and enter a zero on the Missouri refunds page and continue for a few screens, then go back and change it to the original $402. (Sometimes this serves to successfully “reboot” a part of the program, and get it caught up. I've even seen people continue to do this, with it eventually working on the umpteenth try...)

I hope we can get lucky with one of those ideas, jmw43290. But if not, I’ll be looking for something else (and maybe someone else who has experienced this particular scenario will come along)…

[BrittanyS · Accepted solution]

In addition to what RalphH1 said, the rejection you are getting refers to Kansas City or St. Louis Local Tax Refund.  There are a few instances where this would need to be adjusted on your return.  The following two situations would need to occur to have to adjust:

• You itemized on your 2021 return
• You received a tax refund for Kansas City or St. Louis

If you did not itemize or receive a local refund, you would need to enter $0 for the Kansas City/St question. Louis Local refund.  If you itemized and received a local refund from Kansas City or St Louis, you would only enter the amount of your local refund.  Do not include the state refund in this calculation.

@jmw43290