Interest paid by the IRS is taxable just like interest earned from a savings account. You cannot use it as a credit against your additional 2017 refund. Federal refunds are not taxable anyway.
You have to claim the $300 as interest income in Interest and Dividends.
- Type 1099-int in Search in the upper right
- Select Jump to 1099-int
- Say Yes to Did you receive any interest income?
- On Let’s import your tax info go to the bottom and click Change how I enter my form
- On How do you want to add your 1099‑INT? choose Type it in myself
- Enter U.S. Treasury (or IRS) and the amount
If you cannot reach anyone with the number on your notice, call 1-800-829-1040.
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