On your federal return, YES. On your MN state return, NO. Enter the 1099-MISC using the instructions here. Answer the follow-up questions as follows to ensure the income does not generate a self-employment schedule. After you enter the form, you will be asked to describe what the payment was for.
- Describe the reason for this 1099-MISC > MN tax rebate
- Do any of these uncommon situations apply > None of these apply
- Did the payment involve work like your main job > NO
- How often did you get the payment > got it only in 2023
- Did it involve an intent to earn money > NO
- Do you have another 1099-MISC > NO
The amount will be added to ordinary income, and you will be able to subtract it out on your MN return - it is only taxable on the federal return, not your state return. See MN - DOR.