What if I filed in 2 sates, one with a 1099-G refund but the other had a payment? Don't they offset each other

[ssaxton1101]

I moved from Wisconsin to Ohio in 2015.  I had a somewhat sizable refund back from Wisconsin, and a somewhat sizable payment made to Ohio.  If I enter my 1099-G refund from Wisconsin I will have to pay taxes on that, but shouldn't the payment I made to Ohio be subtracted from the refunded amount to show my NET state refund?

[rjs · Accepted solution]

You can't net out the two states. They go in different places on your tax return. The WI refund is reported as income, and the OH payment is an itemized deduction on Schedule A.

The WI refund will only be reported as income on your 2016 federal tax return if you itemized deductions on your 2015 federal tax return and took an itemized deduction for state income tax.

For the OH payment to reduce your 2016 federal tax, you have to itemize deductions on your 2016 federal tax return and claim an itemized deduction for state income tax paid in 2016. You wouldn't itemize deductions unless your total itemized deductions, including the payment to OH, are more than your standard deduction.