Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help. Now that you have settled the issue with the IRS they have, under information exchange agreements, let the state know of their findings. This is "business as usual" for them.
The amounts you pay to the state are deductible on your federal return but only in the year they are actually paid not the year to which they applied. You will get the benefit of the deduction just not in 2007.