Why is the "Schedule 1 State and Local Income Tax Refund Worksheet 2025" in Turbotax different from the IRS 10140 worksheet for 2025?

[yichenztzhu007]

Hello,

After completing and reviewing my 2025 tax return using TurboTax, I noticed the differences between the "Schedule 1 State and Local Income Tax Refund Worksheet 2025" provided by TurboTax and the worksheet outlined in IRS Form 1040 instruction. For a reference, I have attached an image of the IRS worksheet—please take a look.  IRS worksheet is simpler than TurboTax worksheet which also includes the calculation of Recovery Amount and Recovery Exclusion.

Both worksheets yield the same result, but I’m unsure if Turbotax’s worksheet is acceptable to the IRS. Thank you for your help.

Best regards,

Indy

[MelindaS1 · Accepted solution]

If you look at the first line of the image you attached, "Before you begin," it tells you to check the Exception in the instructions for this line (the IRS 2025 1040 instructions, Schedule 1 instructions on page 88) to see if you are allowed to use this worksheet instead of IRS Publication 525 - Taxable and Nontaxable Income, Itemized Deduction Recoveries, to figure if any of your refund is taxable. TurboTax is programmed using the full logic of Publication 525, not this simpler worksheet based on the Exception. 

Hope this is clarifying.

[yichenztzhu007]

Hello Melinda,

Thank you so much for your explanation!  I can figure out the calculation by Turbotax now.

I would like to confirm whether this calculation meets the requirements for acceptance by the IRS.

Thanks!

[MelindaS1 · Accepted solution]

The calculation definitely conforms to the IRS rules and standards, and you should be in good shape. If you have any concerns, you can bookmark this page for reference.