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state tax refund for prior year being taxed, but I itemized that year using sales tax

Forum|Forum|6 years ago
February 4, 2020
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My state adjusted a refund for a prior year (2016), resulting in a State Tax Refund 1099-G this year for a prior year (2016). Turbo tax is treating this as income. I did itemize in 2016, but took state sales tax deduction instead of state income tax (because of AMT, it didn't make a difference). As such, I shouldn't have to pay Federal Tax on the State Refund. On the State and Local Tax Refund Worksheet, Part VII, the refund for prior year shows up, and column D (Taxable Amount) is the refund amount. How do I indicate that in 2016 I used Sales Tax and therefore this should be zero?

TurboTax Home & Biz Windows

Best answer by KrisD15

When you enter the 1099-G you have the option to report that it was for a prior year and make it tax free.

Enter the 1099-G, select 2016, the next screen asks for your payments, but you can enter anything to get past this screen, it doesn't matter.

(or you can look at your 2016 return and get that amount)

Next screen allows you to enter zero (0) for the taxable amount.

KrisD15Answer

When you enter the 1099-G you have the option to report that it was for a prior year and make it tax free.

Enter the 1099-G, select 2016, the next screen asks for your payments, but you can enter anything to get past this screen, it doesn't matter.

(or you can look at your 2016 return and get that amount)

Next screen allows you to enter zero (0) for the taxable amount.

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I

ILuvTaxes29

I'm having a similar problem in Turbo Tax Premier 2019 for Windows.

I received a state refund during 2019 for the 2017 tax year. I used the standard deduction in 2017 on my federal taxes so shouldn't have to pay taxes on this refund, yet Turbo Tax treats it as taxable.

Is there a way to get to a similar screen in the Windows version to report $0 of it was taxable?

Thanks