Yes, you must report income from a Form 1099-G, Box 6, Taxable Grant. It will appear on Line 21 of Form 1040 "Other Income".
You can enter this directly using Forms View - select "Open Form" and type in "1099-G".
Or, in Easy Step go to "Other 1099-G Income" interview in Personal > Personal Income > Other Common Income.
(You cannot enter a Form 1099-G, Box 6 amount in the Farm Business interview. It just isn't there.)
