"automatically generated 1099-G tax refund " Automatically generated by whom? Not TurboTax. You enter this form into TurboTax. Why can't you just do it again?
As for the inclusion of the the business reimbursement as income on your W-2, this means that the employer believes that he/she has a "nonaccountable plan".
To avoid having these reimbursements reported as income, your employer has to have an "accountable plan":
"Accountable plan. To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules.
1. They must have paid or incurred allowable expenses while performing services as your employees. The reimbursement or advance must be payment for the expenses and must not be an amount that would have otherwise been paid to the employee as wages.
2. They must substantiate these expenses to you within a reasonable period of time.
3. They must return any amounts in excess of substantiated expenses within a reasonable period of time.
Amounts paid under an accountable plan aren't wages and aren't subject to income, social security, Medicare, and FUTA taxes"
Please read the text following the heading "Employee business expense reimbursements" starting on page 15 of Pub 15, and then go have a discussion with your employer about why your plan is not an accountable one.
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