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Level 3

Question

How to enter your NYS Inflation Check <<< I figured it out! >>>

Forum|Forum|4 months ago
February 8, 2026
10 replies
45 views

It took me weeks to finally figure this out! Once you enter your numbers, go to Tax Tools > Tools > View your 1040. The Refund check will be there and the amount will be transfered to all correct areas for federal!

STEP BY STEP – NY INFLATION REFUND CHECK IN TURBOTAX (1099-G)

Open your return in TurboTax.
Go to Federal.
Go to Wages & Income.
Depending on where you're at click:
a. '+ Add more income' and then/or
b. 'Refunds Received for State/Local Tax Returns'
c. Click 'Add' or 'Revisit'
At 'Did you get a state or local tax refund in 2025?' click YES
When asked about the refund you received in 2025, enter:
State: New York
Tax return year: 2023
Payments and withholding: 0
Refund amount: enter full amount for MFJ or ONLY YOUR SHARE if half of the total amount on the 1099-G
Continue.
You will see the question:
“Does either apply to your 2023 New York return?”
Even though you took the standard deduction, select:
NO

Why do we select NO?

We selected NO because the NY inflation refund is not a normal tax refund, and choosing NO forces TurboTax to include it in federal income while subtracting it from New York tax, which is exactly what NY requires.

8. TurboTax will then ask:
“Tell us the taxable amount of your refund”

9. Enter the dollar amount of the refund. Click Continue.

10. Continue through the rest of the Federal section.

11. Now go to State and complete your New York return as normal.

12. For federal confirmation, open your 1040.

13. Look at Line 8z (Other income).
14. You should see your half (or all) of the refund included there.

15.If Schedule 1 line 8z includes it AND IT-201 line 25 subtracts it, everything is correct.

KEY POINTS TO REMEMBER

The check is based on 2023 income but taxed federally in the year received.
TurboTax explanations about 2024 are generic and can be ignored.
Do not split any other way.
Do not enter it as Other Income directly.

To confirm:

Where it shows up on the federal 1040

On the 2025 Form 1040, the inflation refund shows up as “Other income.”

Look at:

Schedule 1 (Form 1040)
➡ Part I – Additional Income
➡You'll see your refund amount in Schedule 1, line 10
➡ Form 1040, line 8 (via total income)

To really confirm:

1. Look at your Federal and State returns BEFORE you do all this, and then once youre done. Your FEDERAL will go down by the amount of your tax bracket.

This one is for the history books!!! Share this with as many people as you can : )

TurboTax Premier Online

v8899

Level 3

Thanks. This workaround works, but 99.9% of taxpayers will not do this because it requires you to answer incorrectly to questions regarding the standard deduction in 2023.

TurboTax really needs to release another update to make this straightforward for people to enter.

Monikak11

Level 2

Here's another option we've shared:

Because the special New York Inflation Refund is not a regular tax refund but a special payment that is taxable at the Federal level, you can report it instead in Other Reportable Income. In TurboTax Online:

From the left menu, go to Federal and select the first tab, Wages & Income
Add more income by scrolling down to the last option, Less Common Income, and Show more
Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
Choose the last option, Other reportable income and Start and Yes
Enter the applicable description and amount and Continue

If you need to subtract an item of income from your New York return that was included in your Federal return income, you can enter that adjustment in TurboTax Online at the screen in your New York return labeled "Changes to Federal Income".

Look under Other New York Adjustments to Federal Income, and select Start next to Other changes (adjustments) to your federal income to make the subtraction entry.

@user17701539135

@v8899

kooolerking

Level 4

I am not comfortable trying to fake-out TurboTax with the suggested work-around as I think it may trigger audit or error problems down the road. The "Inflation Refund" payment was received in the 2025 Tax year, regardless of the tax year figures NY State used to calculate it.

The specific issue is that as of the current update, TurboTax 2025 limits 1099-G entries to categories not fitting the NY State "Inflation Refund" payment which is NOT any of the following;

unemployment
a state or local tax refund
a grant
a business / farm refund
an Agricultural payment
etc.

At this point, without "fudging" on the TT software entries, there seems to be no way to correctly enter this 1099-G amount to have it taxed on the Federal but not on the State for the tax year 2025.

When is Intuit expected to be updating TT 2025 to fix this hole in the software?

shmeyers1

Level 2

Thanks for your research and step by step input directions for posting the New York State Inflation Adjustment check for federal and NY purposes. Much appreciated.

gafuller123

Level 2

I called Turbo Tax today and was told if you didn’t itemize this year or in 2023, and took the standard deduction, you don’t need to add the inflation check anywhere. He said you only need to list it if you itemize. I wish they’d release official information on this.

BrooklynJeff

Level 3

Thanks. I would certainly like to have that in writing!

That would certainly makes sense if this is a tax refund and i did not previously take a deduction against it. What business is it of Uncle Sam if NY wants to charge me less tax?

But what do I know ...

minike

Level 2

Thank you for figuring it out. On the form, TurboTax filed in the 2024 payment but it requested the 2023. Once entered, it added it in and the NY form subtracted it. Thanks.

DianeW777

Level 15

Yes, you are correct. If you already have a taxable amount of social security income, and you add more income to your return, such as the New York State (NYS) inflation refund check, it will increase the taxable amount. This means more social security is being taxed along with your rebate/refund from NYS.

For these reasons the tax would be more than you were expecting.

@BrooklynJeff

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

jacquie12

Level 2

Thanks! Both NYS and Turbotax could make this clearer!

isoller1

Level 2

I followed procedure. It worked as described. Schedule 1 includes it & IT-201 subtracts it.

However, when done I did the TurboTax review which said: "State Tax Refund Worksheet: Payments and withholding must exceed sum of individual payments. It looks like the total amount you entered from your 2023 NY tax return is less than the individual payments you made that year (estimated tax, extension payment, or payment when you filed your return). It should be higher than , or at least equal to your payments. Take a look at those numbers and update your total payments and withholding for your 2023 NY tax return. If you need to change one of the other payments, go back to the Tax Payments area to make updates." The payments and withholding box showed $0. Must something else be done or can I ignore the message and file (by mail) anyway. How will this effect next year's use of TurboTax when it populates the 2026 forms? Thanks, Ira

DianeW777

Level 15

You should be able to e-file after using the correct steps here. It should not have any effect on your 2026 tax return because it is not a state income tax refund, it is an inflation refund.

The following steps will help with the answers when entering the New York State (NYS) inflation refund check. By using the steps below it will be subtracted from your NYS income and taxed to federal as required.

Do not enter it as Other Income directly so that it will be reflected correctly on both the federal and NYS return.

STEP BY STEP – NY INFLATION REFUND CHECK IN TURBOTAX (1099-G)

Open your return in TurboTax > Select Federal > Wages & Income > Other Common Income >
'Refunds Received for State/Local Tax Returns' > Add or Revisit
At 'Did you get a state or local tax refund in 2025?' click YES OR on the Summary screen select Add more refunds
When asked about the refund you received in 2025, enter the following:
- State: New York
- Tax return year: 2023
- Payments and withholding: 0 (be sure to enter the zero)
- Refund amount: enter full amount you received or ONLY YOUR SHARE (half if MFS)
- Continue.
On the screen 'Let's check if your 2023 New York refund is taxable' >'Does either apply to your 2023 New York return?'
Even though you took the standard deduction, select: NO (this is not a regular state refund-- Note: TurboTax will include it as taxable on your federal return while subtracting it from NYS correctly.)
'Tell us the taxable amount of your refund' Enter the dollar amount of the refund > Continue
When the federal return is complete, go through your state return, then you can preview each return.

If you would like to preview your form you can use the steps below. (Form 1040, Line 8z-Other Income).

IT-201 will show the subtraction from NYS income.

From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)

Select Tax Tools
On the drop-down select Tools
On the pop-up menu titled “Tools Center”, select View Tax Summary
On the left sidebar, select Preview my 1040

For TurboTax Desktop, change to 'Forms' and review the forms.

@isoller1

[Edited: 03/31/2026 | 7:24 AM PST]

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

isoller1

Level 2

After following your directions I verified that the refund was entered properly as you described on both the Federal and State forms. I thought I was finished. However, when I did a final revue Turbo Tax found an error and wanted me to correct the Schedule 1 Line 1 State and local Income Tax Refund Worksheet "Total Payments and Withholding" which was shown as $0.

They indicated : Payments and withholding must exceed sum of individual payments. The total amount you entered from your 2023 NY tax return is less than the individual payments you made that year (estimated tax, extension payment, or payment when you filed your return) .It should be higher than or at least equal to your payments.

My Question: Can I ignore what TurboTax is flagging as an error and file my return anyway, or is there something else I must do? Also if I ignore the Error will this effect next years taxes. Thanks, Ira

TaxesAreForever

Level 2

I followed your notes and entered it on my federal and all is ok. But it did carry over as income to my NY State Taxes. So now I just have to figure out how to subtract it from the state income.

TaxesAreForever

Level 2

Actually, ignore my last post which I can't figure out how to delete.

I followed your post and it reported correctly in my Federal Taxes. For NY State, it added it to NY additions, and then deducted it from NY subtractions. For other people doing this, I think if you do this correctly, TurboTax should carry it over to NYS in put it in the proper sections.

To check if it worked for my state forms, I went to IT-201, Under Federal Income and Adjustments, Line 4, and it had added the credit with all the other income items. Then under NY Subtractions, line 25, it deducts it. So it's just zeroing it out.

I don't know why Turbotax would react differently for different people so I'm suggesting if you followed the instructions under this post "How to enter your NYS Inflation Check <<< I figured it out! >>>" it should work correctly if you entered it correctly. I had to go back to my Federal return a second time after I finished because I had another tax item listed in that same section and I think after I was done putting in the inflation check amount, and was moving on in the interview, Turbotax was asking about my other tax I entered earlier. So I finished the entire section interview and then went back a second time....after finishing that section's interview I went back a second time and this time it asked me about the inflation check info I had just entered. (It doesn't know it's an inflation check, I'm just talking about the amount we're working with here). Maybe there's a glitch in Turbotax so you might want to do that section again and just read carefully. Anyway, now it's entered correctly. I didn't have to manually adjust anything. I'm reading here that people were getting returns kicked back from NYS? Maybe because they were manually adjusting but now putting it in both the addtion and the subtraction section.

JOQ

Level 2

1) I never received a form 1099-G from the state.

2) The check says on it that it is a refund issues on the income tax return for the year 2025.

Now what do I do?

BrooklynJeff

Level 3

@JOQ

1) NY did not send out the 1099s, but if you go to my.ny.gov you should find it online there. There's not much on it aside from your SSN and amount

2) Decide if you want to declare it on your Fed return or not (you'll have to parse out the info in this thread). If so, this thread explains how to do it so it wont be taxed on the state return..

For the record , I don't fully agree with the idea that it should be taxable at all, but I'm no expert. so I included it anyway. ( I'm getting a big return so it doesn't hurt as much)