Here is my understanding of the 1099-G for the State Income Tax refund versus the 1099-G for the Parental Choice Tax Credit.
- If you did not itemize in 2024 (for tax year 2023) you can ignore your 1099-G State Income Tax refund because it is not included when using the standard deduction. It also clearly states this on your 1099-G form.
- The refund was paid in 2024 for tax year 2023, so that is why it is included on your 2024 return if you did itemize in 2023.
- Likewise, if you do not plan to itemize in 2024, you can ignore the 1099-G for the Parental Choice Tax Credit for Tax Year 2024. It is Tax year 2024, because like your refund, it was RECEIVED in 2024. This has nothing to do with your 2022 tax form that was the basis of what amount you would receive.
- Like stated elsewhere, Oklahoma was required to send out a 1099-G for the PCTC:
https://oklahoma.gov/tax/individuals/parental-choice-tax-credit.html
Will I receive a 1099-G from the Oklahoma Tax Commission (OTC)?
“Pursuant to Internal Revenue Code § 6050E, a Form 1099-G must be issued for certain types of government payments, including state or local income tax refunds, credits, or offsets. The OTC is required to issue a Form 1099-G to taxpayers who receive a Parental Choice Tax Credit payment. This does not mean the credit is taxable. Please consult a tax professional if you need more information.”
Will I have to pay income tax on the private school tax credit payment?
“HB3388 exempted the Parental Choice Tax Credit from Oklahoma income tax.
The Oklahoma Tax Commission cannot make a determination on whether a Parental Choice Tax Credit payment is taxable to a taxpayer for federal income tax purposes; that determination is based on each taxpayer’s individual facts and circumstances. Please contact your tax professional if you need more information.”
5. So, the tax credit is NOT taxable in Oklahoma, and if you did not itemize, it is not taxable on your Federal since it says you can ignore it.
6. In Turbo Tax (I’m using the desktop version), under “Additional Oklahoma Adjustments, the third item down is the “Parental Choice Tax Credit for Private School”. If you click “Learn More”, you see the following:
“You may deduct any Parental Choice Tax Credit payments received for qualified expenses paid for an eligible student to attend an accredited private school, to the extent such payments are included in your Federal AGI. Provide documentation to support amount claimed and a copy of your federal return.”
If you did not itemize, and therefore did not enter this on your Federal return, you will not enter it here either. If you did not include it on your Federal AGI, you can’t claim it here.
Essentially, if you did not itemize last year, you can ignore the 1099-G State Income Tax refund, and if you do not plan to itemize this year, you can also ignore the 1099-G for the PCTC.
