How to report my previous year Tax Refund repaid to CA Franchise State Board in 2018's filing?

Forum|Forum|7 years ago
March 28, 2019
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I filed my tax return last year (2017), using Turbo Tax and filing as Head of Household. I received a CA State tax refund of $X. Turbo Tax did not flag anything about my filing status. But CA Franchise State Board said that I did not qualify for HOH (Note). As a result, I have to repay $Y (a significant portion of $X) back to the State.
For taxes this year, I received 1099-G from CA, stating that I received the whole refund, $X. I need to report this as taxable income. But in reality, I didn’t get $X because I paid back $Y.
How then, do I report the fact that I didn’t get $X back from State, but rather $(X-Y) this year, especially in Turbo Tax?

Note: Turbo Tax still recommends me to file as HOH for 2018's!

N

NCPERSON1

Did you itemize in 2017 ?

If yes, the 1099-g form is reportable in 2018 as income. If no, then it is not income

what you are required to pay back to CA in 2018 is a deduction in 2018 , assuming you actually paid it and assuming you are itemizing and of course limited by $10,000 SALT limit . If you are taking the standard deduction, it is not otherwise deductible (it is just the way it works)

That 1099-g has been reported to the IRS and they will be expecting to see it (assuming you itemized in 2017) so best not to net against what CA wants from you in 2018