Retirement tax questions

The following steps should help with the answers when entering the New York State (NYS) inflation refund check. By using the steps below it will be subtracted from your NYS income and taxed to federal as required.

Do not enter it as Other Income directly or it will not be reflected correctly on both the federal and NYS return.

STEP BY STEP – NY INFLATION REFUND CHECK IN TURBOTAX (1099-G)

1. Open your return in TurboTax > Select Federal > Wages & Income > Other Common Income >
2. 'Refunds Received for State/Local Tax Returns' > Add or Revisit
3. At 'Did you get a state or local tax refund in 2025?' click YES OR on the Summary screen select Add more refunds
4. When asked about the refund you received in 2025, enter the following:
   • State: New York 
   • Tax return year: 2023
   • Payments and withholding: 0 (be sure to enter the zero)
   • Refund amount: enter full amount you received or ONLY YOUR SHARE (half if MFS) 
   • Continue.
5. On the screen 'Let's check if your 2023 New York refund is taxable' >'Does either apply to your 2023 New York return?'
6. Even though you took the standard deduction, select: NO (this is not a regular state refund-- Note: TurboTax will include it as taxable on your federal return while subtracting it from NYS correctly.) 
7. 'Tell us the taxable amount of your refund' Enter the dollar amount of the refund > Continue
8. When the federal return is complete, go through your state return, then you can preview each return.

If you would like to preview your form you can use the steps below. (Form 1040, Line 8z-Other Income). 

IT-201 will show the subtraction from NYS income.

From the left rail menu in TurboTax Online, select Tax Tools (You may have to scroll down on the left rail menu.)

1. Select Tax Tools
2. On the drop-down select Tools
3. On the pop-up menu titled “Tools Center”, select View Tax Summary 
4. On the left sidebar, select Preview my 1040 

For TurboTax Desktop, change to 'Forms' and review the forms.

@TeaTax23 

@Benbonnett