9570
The following diagnostic is generating:
State and local tax refund(s) entered in Screen 14.2 were not taxed because the 'Itemized in {PriorTaxYear} ' box was not checked (screen 14.2, code 101).
Solution:
If the taxpayer did not itemize deductions in the prior year, then a state or local tax refund is generally not taxable. This diagnostic is informing you that the software is excluding the refund from income based on that unchecked box.To include the refund as taxable income (if appropriate), check the Itemized in "prior year" box in Income>Screen 14.2 State Tax Refunds, Unemployment Comp, (1099-G)>State Refund Wksht hyperlink>Refunds Taxable in "Tax Year" Worksheet.
