Hi,
I itemized by deductions but TurboTax is saying my CA state and local tax refund 1099-G is not taxable?
This is great news, but per the rules it appears it should be because I itemized my deductions ($17,100) and they exceed $10,000. And not subitting sales tax.
I did make large estimated tax payment to CA last year, which is the reason for the refund. So not sure if that is why?
Can you please take a look? Screenshots below. Appreciate your help very much!
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The taxable portion of your State/Local Income Tax Refund involves a calculation that considers how much, if any, tax benefit you received from claiming the taxes. Certain factors are considered, such as the actual amount of taxes deducted (especially due to the $10,000) limit on the deduction in 2022, what your Standard Deduction would have been if you didn't itemize, and how much Sales Tax you could have deducted instead of State/Local Income Tax.
You can see how TurboTax calculated this amount by viewing the State and Local Income Tax Refund Worksheet.
In your MAC program:
Then review the entries to verify that this is correct.
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