It often happens that a state will issue a payment to help taxpayers that is not taxable to that state, but taxable on the Federal return. These change from year to year and may even change during the filing season. For 2025, the special New York taxpayer assistance payment is nontaxable to New York but taxable on the Federal return.
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.
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