If you applied some of last year's Federal refund towards this year's taxes, when itemizing this under "Your Deductions and Credits > Taxes Paid > Other Income Taxes", your allocation will automatically transfer over (imported from last year's return). This is fine. The bug however, occurs on the next form "State and Local Refunds Applied to 2007" (at least for VA returns). It seems there is no edit on the amount of 2006 refund applied to 2007 State taxes!
Below, are some screen shots (for demonstration purposes only). Both Federal and State "Error Checkers fail to detect any problems. The Federal return appears to itemize the full amount of last year's refund. The VA State return however, applies the entire amount!!!
I've used TurboTax for about 10 years and have always loved the product. This is the first year I've tried the online version ... looks like a few things slipped through QA at Intuit!
Last note: Use integrity and common sense when filing your taxes. If you're using TurboTax online, make sure you double check the return (or have a Tax professional do so).
