Capital credits are a return of money paid for electricity in a previous year and are generally not taxable income for residential consumers. Since you received a 1099-MISC, you will enter it as stated here and then create an offset entry with instructions at the bottom.
Please feel free to post any additional details or questions in the comment section.
With thanks to SuperUser Carl:
"Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.
Enter the 1099-MISC exactly as printed, and then Continue.
Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.
Select None of these apply, then Continue.
Select No, it didn’t involve work….. and Continue.
Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.
Select No, it didn’t involve an intent to earn money, then Continue.
Select NO, then Continue.
Click the DONE button, and that does it."
To create an offset entry:
In TurboTax 2017, offset your income by taking these steps:
1. Federal tab (left of screen)
2. Then Wages & Income
3. Pick, “I’ll choose what I work on” Button
4. Scroll down to Less Common Income
5. Pick start next to Misc Income, 1099-A, 1099-C
6. On the next screen choose other reportable income (at the bottom)
7. Say yes that you have other taxable income.
8. For description enter "non-taxable capital credits to homeowner." Enter the amount of the income with a minus sign (-) in front of it.
This effectively removes your income from the tax calculations and will appear on line 21 of your Federal Form 1040 as a negative dollar amount.
