If it is a refund from over-charged interest, it would not be considered as income.
You could just not enter the 1099, but following the steps above offered by @ThomasM125 you will be letting the IRS know what the 1099-MISC was for and why you are not claiming it as taxable income.
Follow the steps carefully so that the income is not considered as earned or Self-Employment.
"Under most circumstances, a forgiveness of the principal of a debt is taxable income to the debtor whose debt was forgiven, but a reduction in the rate of interest does not result in taxable income to the debtor."
Law Review
SCRA LINK
Go to Wages & Income section
Scroll down to the VERY LAST option "Less Common Income" and click Show more
On this new drop-down list scroll down to the VERY LAST option "Miscellaneous Income" and click Start
Now scroll down to the VERY LAST option "Other reportable income" and click Start
Select YES on the "Any Other Taxable Income?" screen
Type "SCRA 1099-MISC" and the amount
Repeat and enter "Tax Exempt SCRA refund" and the NEGATIVE amount.
TO CHECK IN TURBOTAX ONLINE:
Click "Tax Tools" on the LEFT SIDE BAR then click "Tools" that open below
Click "View Tax Summary" on the screen
Click "Preview my 1040" which now appears on the LEFT SIDE BAR
Look over Schedule 1 and your 1040.
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