Get your taxes done using TurboTax

When you enter the 1099-G you have the option to report that it was for a prior year and make it tax free. 

Enter the 1099-G, select 2016, the next screen asks for your payments, but you can enter anything to get past this screen, it doesn't matter. 

(or you can look at your 2016 return and get that amount) 

Next screen allows you to enter zero (0) for the taxable amount.