Why does turbox seems to claiming too much of 2017 state tax refund taxable. error is due to over paying with the extension in 2018 ?

It seems to me a state refund is taxable only to the extent the benefit you got in previous year was more than the actual tax was

I itemized 2017 and 2018, used payment of state tax, not sales tax, and was way above the standard deduction in 2017

state taxes claimed on 2017 schedule A 4,521.
Withheld in 2017 4,521.
Paid with 4/15/18 Extension 214

actual 2018 taxes (after credits) - $4381

My refund for 17 taxes received in 2018 was 354 refund I assert I ONLY owe tax on only Tax on 140

Turbo tax says I owe tax on 338 of 354 ?

there are no other estimated taxes paid

402

Level 15

Jun 1, 2019 10:34:27 AM

You are reducing it by the $214 what you paid with the extension, and had you not paid the extension of $214, your refund would have been only $140.

I agree with your $140.

I'll take a look at our programing of this issue.

Thank you .