Taxability of NYS inflation relief check

That is correct.  Do you have a more specific question?

The rebate is treated as a refund of your 2023 state income tax.  If you used itemized deductions and deducted your state income tax on your 2023 federal tax return, the rebate represents a refund of a previous deduction -- that makes it taxable.  (Or, to explain a different way, suppose you deducted $3000 of state income tax.  Because of the $300 rebate, your state taxes were really only $2700 so you deducted too much.  Instead of filing an amended 2023 return to change the deduction, you report the rebate as taxable in the year you received it.)

If you used the standard deduction on your federal return in 2023, then you got no special benefit for the state taxes you paid, so it doesn't change your situation if you get a refund of part of those taxes.  

There is a section on the income page for "taxable refunds of state and local taxes." 

New Yorkers who received this payment should have been issued a Form 1099-G even if for most taxpayers this is not taxable income.  NYS does not mail out the Form 1099-G nor alerts taxpayers.  Istead a tax payer or preparer can find copy of Form 1099-G by going to website - tax.ny.gov and click the headings labeled Individuals.  If you scroll down on the Individual Home Page you will see a section called Individual Resources.  Under the column on the left, the 9th item listed says Form-1099-G.   Click to get info.  You will need to enter taxpayer's social security number, zip code and the year of recent NYS return with the total payments shown on page 4 (I believe) of that return (IT-201 or IT 203).  If you see form listed you can enter in tax refund section but by indicating you had standard deduction for 2023 on federal return (or Tax Deductions over $10,000 limit) the program will indicate it is not taxable and it will not show as income on the 2025 Federal Tax Return.

From what I can find online, the NYS inflation refund checks appear to be taxable at the federal level, for everyone.  Per the NY.gov site, link below, the refund was based on your income and filing status, not whether you itemized deductions.   Per several articles online, two links below, the state could have structured the refund program differently to potentially avoid federal taxation, but they didn't do so for whatever reasons.   I may be mistaken, but that's how I'm interpreting it.

https://www.tax.ny.gov/pit/inflation-refund-checks.htm

https://www.syracuse.com/politics/2025/10/ny-inflation-refund-checks-are-taxable-what-you-need-to-know.html

https://www.wxxinews.org/new-york-public-news-network/2025-10-01/you-should-report-gov-kathy-hochuls-inflation-refund-checks-on-your-taxes

Dear Brian,

           You may hire me to prepare you income taxes. You may call me at [phone number removed].

                  Tim