Q. Can the amount of 1099-G income be included as rental income, 1099-G income, and then entered as an adjustment on Line 8z of Schedule 1 (not line 24 z ) as other income and if so what is the "type"?
A. Yes. that's an alternate way to do it. But I wouldn't. Your situation is common enough, these days, that an IRS letter is unlikely.
If you received an erroneous 1099, you have several choices (your 1099-G is probably not erroneous, but the procedure is the same):
- Ideally, you get a corrected 1099 from the payer (unlikely in your case)
- Don't report it on your return (except on Schedule E). Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
- Report the income as misc line 8z, Schedule 1 income (enter in TurboTax at the 1099-G) Then enter a line 8z deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description. Call it something like "1099-G income reported on Schedule E"
- Do nothing and hope you can explain it away when & if the IRS contacts you
