In previous year, a client overpaid in state estimated tax by 20k and itemized. He received a 1099g. For this year, he has to pay tax on his 1099g. 99% of his 1099g was his estimated tax. Is there any way to negate tax on 1099g that was from his overpayment of estimated tax?
They are not subject to tax on $19,800.
They are only subject to tax on the amount of the refunded tax that generated a tax benefit in 2022.
This is a basic concept and you are not grasping it.
Try rerunning last year's tax return without the $20K tax payments. How much, if any, did their total federal tax change?
Susan.... I doubt seriously that last year's return was done in Lacerte. As there would be a worksheet showing the taxable amount (as you well know).
I sorta doubt Lacerte is being used for 2023, but I could be mistaken...
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