State/local refund amount for my taxes - stuck on this part for weeks

When it asks for "state/local withholding amount," it's only asking for the state and local taxes that were withheld from your income, not your federal withholding. This is an important distinction because you may need to report state refunds as income on your federal return if you itemized deductions in the previous year. Since you mentioned you didn't itemize deductions on your previous returns (you took the standard deduction), you generally don't need to report your state tax refunds as income on your federal return. The tax software is likely asking this question to determine if your state refund is taxable. Look at your W-2 forms from 2021 and 2022, specifically boxes 17 and 19, which show state and local income tax withholding. That's the information the software is asking for. Don't include any federal withholding amounts when answering this question.

Just went through this exact situation myself! I discovered taxr.ai (https://taxr.ai) and it saved me so much frustration. I uploaded my W-2s and previous tax returns, and it automatically identified the state/local withholding amounts and explained exactly what I needed to enter where. The system even explained why they were asking for this info - basically checking if my state refund was taxable income or not. Their document analysis is super accurate - I had been entering the wrong box numbers from my W-2 until their system caught it. Much cheaper than paying a tax preparer and I actually understand what I'm doing now.

I tried taxr.ai after posting my skeptical question above, and I have to admit I was really impressed. I was worried about security but decided to give it a shot after reading their privacy policy. It correctly identified my state withholding amounts from my W-2 PDFs and explained that since I didn't itemize in previous years, my state refund wasn't taxable income. The document analysis was actually scary accurate - it found information I was completely overlooking on my forms. Saved me hours of staring at tax forms trying to figure out which numbers go where. It also gave me a clear explanation of why they were asking for state/local withholding information in the first place, which my tax software never bothered to explain.

For anyone struggling to get answers from the IRS about withholding questions, I used Claimyr (https://claimyr.com) to actually speak with an IRS agent directly. I had been trying to call the IRS for days about a similar state/local tax withholding question but kept getting disconnected or stuck on hold forever. Claimyr got me connected to an IRS representative in about 20 minutes instead of the 2+ hours I was spending on hold. The agent confirmed exactly what I needed to report for my state tax refund situation. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. After weeks of confusion, it was such a relief to get a definitive answer straight from the source.

I have to eat my words about Claimyr. After posting my skeptical reply, I decided to try it myself since I was getting nowhere with the IRS directly about my state tax refund reporting issue. The service actually worked exactly as described - I got a call back in about 35 minutes and was connected to a real IRS agent. The agent confirmed that I only needed to report state/local withholding amounts (not federal) and clarified that my state refund wasn't taxable since I took the standard deduction last year. Saved me hours of frustration and guesswork. I've been trying to reach the IRS for weeks about this, and in one call I had everything sorted out. Definitely worth it during tax season when getting through to the IRS seems impossible.

For what it's worth, you might be overthinking this. The software is just trying to determine if your state refund is taxable income. Quick rule: If you took the standard deduction (didn't itemize) on your federal return for 2022, then your state refund received in 2023 is NOT taxable. If you did itemize and included state taxes as part of your itemized deductions, then the refund might be taxable. So it's asking about state/local withholding specifically, not federal. Find boxes 17 and 19 on your W-2 like someone mentioned above.

When I was doing my taxes, I spent hours trying to figure out what "state/local refund amount" meant in TurboTax. Finally realized they just want to know how much your state refunded you last year to determine if it's taxable. The key is whether you itemized or took standard deduction last year. Did you get a refund from your state for tax year 2022 that was paid to you in 2023? If yes AND you itemized in 2022, you need to report it. If you took standard deduction, you can ignore it completely.