I live in Washington State and had income from property sales in California for 2016 for which excess real estate taxes were withheld, and which were refunded in 2017 for which a 1099-G was issued. However I DID NOT take a deduction for the California State taxes on my Federal Schedule A for 2016, but instead I took the deduction for Washington State sales taxes. How do I keep Turbo Tax from making me pay 2017 federal taxes on the tax refund from California for 2016 when I did not take a deduction for the California State taxes on my 2016 Federal Return. I shouldn't have to pay 2017 Federal taxes on the tax refund from California, when I did not deduct the California State Taxes for 2016 on my 2016 Federal Tax return. However, I can't find a way to tell TurboTax that I did not take a schedule A deduction for these State taxes.