Yes, you do have to report the amount as "Other income", but because of the nature of this amount, it should not be taxed.
I am assuming this is all related to personal banking and not to a small business account. If that is the case, you can enter a balancing transaction to offset the amount.
Here is how to enter your 1099-MISC box 3 amount:
- Select Federal on the left side menu.
- Select Income and Expenses toward upper left.
- Expand/ scroll down the list and find the section called, Less Common Income.
- Scroll all the way down and select Miscellaneous Income, 1099-A, 1099-C.
- Select Other reportable income.
- Answer the first question Yes.
- Enter SCRA refund as the description and amount on this page, click Continue.
- Click Add another income item.
- Enter SCRA refund as the description and the same amount as a negative number on this page, click Continue
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