federal carryover worksheet

Your best bet is to enter it using the Step-by-Step interview instead of entering it in forms mode. The interview will walk you through it so you don't have to deal with the confusing forms.

If you are using TurboTax Home & Business click the Personal Tab. If you are using any other version click the Federal Taxes tab. Click Wages & Income. Click Explore on My Own. On the screen "Your 2011 Income Summary," scroll down to the section "Other Common Income." Click the Start or Update button for "State and Local Tax Refunds." On the screen where you enter the refund ("Tell Us About Your State or Local Tax Refund") be sure to check the box that says "I used my refund to help pay my 2011 taxes" and then enter the amount that you applied to 2011. In your case you will enter the same amount in both boxes - the refund amount and the amount applied to 2011.

TurboTax will ask you some additional questions to determine whether the full amount of the overpayment should be entered on Form 1040 line 10.

Thank you very much. Your help is much appreciated.