It depends. Based on what I understand, the property manager sent a 1099-MISC for actual rents received from tenants. Then, the Colorado (CO) program reimbursed the tenant's their rent which must have come through you since you received the Form 1099-MISC from CO.
If my understanding is correct, then you would report all of the income as rental income, then under miscellaneous expenses you could show 'Tenant CO Reimbursement' and the amount that was refunded to the tenants.
This will provide a clear in and out of the rental income on the tax return, then keep all the documentation with you tax return records.
On the other hand, if you actually received rents from CO, in addition to the rent received from tenants, then the combined total would be taxable rental income and there would be no duplication. This assumes you did not reimburse any tenant for rent they had paid.
Please update if you have more questions.
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