2020 state refund input

Forum|Forum|5 years ago
December 13, 2020
3 replies
7 views

where to input state refund received for identical state payment in error and put in payment worksheet

ProConnect Tax

This topic has been closed for replies.

George4Tacks

Level 15

Which state? Please give more detail. Was the payment in error and put in payment worksheet allowed as a deduction in the prior year? What year? 1040 return?

Answers are easy. Questions are hard!

E

Ephesians3-14

Level 7

Huh? You need to restate your question. Maybe explain what happened....

E

elscparichboroAuthor

Level 2

Let me restate. Client paid a large state estimated income tax payment in error in 2020. I caught error and got the state to issue a refund Also In calendar year 2020. Client can not deduct the large state income tax payment on schedule A due to 10k cap. I expect state to issue a 1099 to pick up refund as taxable page 1 income on the 2020 return. How do I record this refund in Pro connect to avoid a larger income tax bill for the client ?

George4Tacks

Level 15

1. Since the 2020 estimate was refunded in 2020, you would be correct to not claim it as a deduction.

2. Even when a 1099 is issued for a refund, it is our job to compute whether it is taxable or not, There should be a worksheet to use, or just don't enter the 1099 and keep a note that it was not recorded because of the tax benefit rule. 1099's also indicate (or should indicate) the year the refund is issued for. In this case a 2020 1099 for 2020, but there might also be a 2020 1099 for 2019. (way too many 4 digit numbers in a row, but hopefully you get the idea.)

3. Are you using ProSeries or are you using ProConnect Tax (online)?

Answers are easy. Questions are hard!

George4Tacks

Level 15

@elscparichboro To get a good answer, you must give more details. I am also guessing that you posted under the wrong software. I THINK you are using PROSERIES and not the online ProConnect Tax.

Answers are easy. Questions are hard!

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