STEP BY STEP – NY INFLATION REFUND CHECK IN TURBOTAX (1099-G)
- Open your return in TurboTax.
- Go to Federal.
- Go to Wages & Income.
- Scroll to State and Local Tax Refunds (1099-G) and click Start or Edit.
- When asked about the refund you received in 2025, enter:
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 (Select 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.) - TurboTax will then ask: “Tell us the taxable amount of your refund” Enter the SAME AMOUNT you entered in step 5
For federal confirmation, open your 1040- Look at Line 8z (Other income)-You should see your half (or all) of the refund included there.
If Schedule 1 line 8z includes it AND IT-201 line 25 subtracts it, everything is correct.
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