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?
