Q. Do I need to claim it on my taxes even though it was refunded back to my AmeriCorps account?
A. No, if it was refunded in the same year.
But you may want to report it and then show an adjustment to ward off an IRS inquiry.
If you received an erroneous 1099-Misc, you have several choices:
- Ideally, you get a corrected 1099-misc from the payer
- Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the old IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
- Report the income as misc line 8z, Schedule 1 income (enter in TurboTax at the 1099-MISC screen)
Enter the 1099-Misc
On the next screen Describe what the payment was for
On the next screen select "none of these apply"
On the next screen select "No it didn't involve work like my main job"
On the next screen select "I got it in 2023" ONLY (even if you get/got it in other years, this is a necessary workaround for the no intent to earn money situation)
On the next screen select No, it didn't involve intent to earn money
TT will put the amount on line 8z of Schedule 1 as other income
Then enter a line 8z deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description. Call it something like "erroneous 1099 received"
- Do nothing and hope you can explain it away when & if the IRS contacts you
Reference: https://ptmoney.com/tuesday-tax-tip-what-to-do-with-an-incorrect-1099-form/#:~:text=What%20Should%20....
