Do I enter a reimbursement from the IRS I received in 2018 for a payment I made in 2017 for a penalty plus interest. If I need to enter it - where in Turbo tax?

[Rachel_W · Accepted solution]

If the IRS paid you interest, they should have sent you a Form 1099-INT which you will need to report on your Tax Return.  The refund of the penalty does not need to be reported as income on your return.

To enter your Form 1099-INT, please follow these instructions if using TurboTax Online:

• Sign In to TurboTax Online
• Click "Take Me to my Return" 
• Click "Federal" from the left side of your screen
• Scroll down and click "Edit/Add" next to "Interest on 1099-INT"

If using the TurboTax CD/Download Desktop version, please follow these instructions:

• Open your return
• Click the "Wages & Income" tab
• Click "I'll Choose What I Work On"
• Scroll down to "Interest and Dividends"
• Click "Start/Update" next to "Interest on 1099-INT"
• From here you can enter the interest the IRS paid you in 2018

Please comment below if you need further assistance entering the interest income you received from the IRS.

[987886543]

I already included the interest as the IRS sent me a notice of Interest paid and the need to report it in 2018.  So I won't include an entry for the Penalty reimbursement.  Thank you!