Can't efile MN return because of tax rebate

[abigail82]

TurboTax keeps saying there's an error and won't efile my state return because of the MN tax rebate. I've entered the amount under 1099-misc on my federal return and put it on state form m1m to deduct it from state but when I go to file it comes up as an error and won't let me do it. I can't figure out what's wrong. 

[SharonD007 · Accepted solution]

Try deleting the Form 1099-MISC from your federal tax return, deleting your MN tax return, and re-entering.

To delete the 1099-MISC:

1. Launch TurboTax and Select Wages and Income
2. Scroll down and select Edit by your Form1099-MISC
3. Select the trash can to delete the 1099-MISC for your rebate.

To delete your state return using TurboTax Online:

1. Scroll down to State Taxes and select Your State Returns 
2. Select Delete next to MN and Yes.

If you are using TurboTax Desktop, refer to the TurboTax article How do I clear my state return in the TurboTax for Windows software?

Follow the instructions below to add the 1099-MISC for your MN rebate: 

1. Launch TurboTax and select Wages and Income
2. Scroll down to Other Common Income and select Start by 1099-MISC
3. Enter your 1099-MISC and select Continue
4. Enter MN Rebate for the description and Continue
5. On the Does one of these uncommon situations apply? screen, select None of these apply
6. On the Did this involve work that's like your main job? screen, select No, it didn't involve work like my main job
7. On the How often did you get this income? screen, select I got it in 2023 and Continue
8. On the next screen, select No, it didn’t involve an intent to earn money and Continue
9. On the next screen, select No, if you don’t have any more forms to enter and Continue

You will see the income on line 8z with a description of Other Income (which will flow to line 8 of your 1040). When you pay for TurboTax, you will be able to view your forms.

Follow the steps below to deduct your MN tax rebate from your state income so you won’t pay state taxes on it: 

1. Select Prepare State from menu on left side and select Start
2. Select MN and select Continue
3. Scroll through the screens and when you get to Tell Us About Other Income Adjustments, select Received a one-time tax rebate for tax year 2023 from the State of Minnesota and select Continue
4. Enter the Rebate Payment Amount.

You will see the subtraction of your MN rebate from your income on line 7 of your MN M1M form since your rebate isn't taxable in MN.