How do I deal with a 1099-G that is taxable at the federal level but not the state?

We'd love to help you complete your tax return, but need more information. Can you please clarify your question?

 

What type of income is on your 1099-G and what state are your filing?

Thanks Julie.  The State of MA made a special $500 payment in 2022 to employees deemed necessary who worked during Covid.  The State has ruled this payment is not taxable on State tax return but it is taxable at the federal level.  The issue is the software carries the $500 payment (1099-G) over automatically to the State return and will not allow me to over-ride it on the actual tax form if I want to e-file.  

Massachusetts has not issued guidance on how to properly report your $500 COVID-19 Essential Employee Premium Payment.

 

Since you mention an override, I’m assuming your are using TurboTax CD/Download. This is a workaround.

 

To remove this payment from Massachusetts:
 

1. Tap Forms in the top right corner
2. In the left column, Forms in My Return, tap Schedule X in Massachusetts Individual forms
3. Scroll down to line 4 (Fees and other 5% income). Your $500 payment should appear there
4. Tap the box. A magnifying glass will appear.
5. Tap the magnifying glass to bring up Fees and Other 5% Income Statement
6. Enter -$500 on this statement
7. Tap Step-by-Step in the top right corner to get back to the interview mode

How do i fix the the MA tax form on the online version?  I entered in the MA COVID-19 Essential Employee Premium Pay  of 500.00 on the federal and now I need to correct it so that it is not taxed on the MA taxes?

 

Was this issued as a Paid Family leave (PFML) benefit? if so, there is a section in your Massachusetts State Return where you report this.  It is a screen that looks like this. 

 

Select the State Taxes tab in your return to begin working on your state return in order to access this section.

 

 

@kc5