Hi Phoebe.  Actually, the tax benefit rule is exactly why I need to zero out the state income tax deduction.  I tried it both ways - leaving the state income tax deduction intact and then removing it completely.  Lacerte does its magic in the worksheets to let us know the portion of the state tax refund that will be taxable in the subsequent year.  Leaving the state income tax deduction intact resulted in about 1/3 of the the 2018 state tax refund being taxable in 2019.  When zeroing out the state income tax deduction, the fed and state tax refunds are the same.  However, the state tax refund is not at all taxable in 2019 because there was no state income tax deducted in 2018.  Lacerte's program does an allocation of the $10,000 state and local income and property tax deduction when determining what portion of the state tax refund will be taxable in the subsequent year.  It works for me!