2021 State and Local Income Tax Worksheet

[Dan]

Question:  Are you required to enter the amount of state and local general sales taxes you could have deducted in 2020 on the State Income Tax Worksheet?  If you are to enter this, it will lower your State(s) refund.  In ATX, I deleted this amount on the worksheet.  For example:  Originally 1a had 1965; 1b had 2231; and 1c (general sales tax could have deducted) was 914.  Before I deleted the 914 from 1c the taxable amount was 1317.  When I deleted the 914 from 1c the amount was 1965 which was the total of state refunds.  

[Abby Normal]

The sales tax that could have been claimed in the prior year is part of the calculation for how much of the state tax refund is taxable. Sometimes it matters and sometimes it doesn't.

[Dan]

The ATX program automatically puts the amount in the State and local income worksheet on line 1c.  I don't know how they get the amount in 1c.  When I fill out the State and Local Income Tax Refund Worksheet for Schedule 1, line 1, I don't see any amount for 1c.  When I delete the amount in 1c.  it shows my total state tax refund.  When I restore line 1c it brings in the original number before I had deleted it and causes my state refund to be less than received.