I contacted the state. I was told:
“do what you want. As far as Oklahoma is concerned, it’s not taxable for the state. We were required to send out the 1099 due to federal guidelines.”
I contacted the IRS and was told to input on my schedule A (I believe that’s the sheet she said) but she couldn’t explain how the tax year listed on the 1099 would affect when to file or how that year is actually calculated.
It was hoop after hoop with no real help. Generic answers continued to be spit out but no real thoughtful consideration on how to accurately enter the info and the tax year to apply the refund to. I was told by both parties that TurboTax needs to be updated but I had checked with H and R block and their system was the same (not allowing 2024 to be inputted as the tax year).
I stand by statement that I think the tax year should have been 2022 as this was the year the state used to decide eligibility (and since the year paid was 2024, it is filed for 2024 as a tax credit/refund). The state allows the offset if done this way (so not taxed by state) and the federal form is able to utilize the info as to whether it is taxable from them (did you itemize in 2022 or not). I think the state haphazardly sent out a 1099 because it was required by IRS without much thought—much like the responses I received when I called and emailed.
