1099-G for 2024 can't be entered

[srtaylor1317]

I have an OK 1099-G for year 2024 because of the Parental Choice Tax Credit. However, Turbotax only allows me to enter a 1099-G for years 2023 and earlier. What do I do with this 1099-G?

[SabrinaD2]

To enter your Oklahoma 2024 1099-G for the Parental Choice Tax Credit in TurboTax Online, follow these steps:

Sign in to TurboTax Online and open your tax return.

Navigate to the "Federal" section by selecting "Tax Home" from the left-hand side menu or from the main dashboard.

Select "Income & Wages" or "Income" and look for the option to select  forms or income like "1099-G."

Search for "1099-G - Other " in the search bar or scroll down to find the category labeled "Government Payments" or similar.

Return to the "Income" Section and Scoll to the the 1099G - Other  forms

Enter the details from your 1099-G form:

• Select "Unemployment and Paid Family Leave" or any applicable section that fits the Parental Choice Tax Credit (it may ask for details about other credits).
• Manually input the information listed on your 1099-G form, including the amount of the credit and any additional information provided (e.g., state tax withheld).

Once reported the Oklahoma Parental Choice Credit via the 1099-G on the federal side, follow these concise steps in TurboTax for the state return:

Go to Oklahoma State Return: Open the state section in TurboTax.

Find Credits: Navigate to the "Credits" section.

Locate Parental Choice Credit: Search or scroll to find "Oklahoma Parental Choice Credit."

Confirm Details: Verify or enter your information related to the credit (tuition, school details, etc.).

Complete the Return: Review, and TurboTax will apply the credit to your Oklahoma return.

[srtaylor1317]

It sounds like your point is that it is appropriate to mis-record the tax refund as a taxable grant or similar government payment. However, the 1099-G I received shows the amount in box 2 and is a state tax credit. And if I look at the Turbotax forms view, I can see that box 2 of a 1099-G is specifically reserved for state tax credits, but only years 2023 and older. Are state tax credits handled the same **everywhere** as taxable grants? TurboTax really just needs to update the form to allow 2024 state tax credits to be entered.

[AmyC]

Thank you for the additional information. Since the form is showing the credit, then you do not enter it in the federal. Simply claim the credit in the state portion as an OK adjustment.

[jayohdee]

@srtaylor1317Where did you end up with this? I've asked a similar question and haven't gotten a satisfactory response.

[srtaylor1317]

I do not have a satisfactory conclusion. I realized that for myself, since I itemized in 2023, but do not plan to itemize in 2024, I can disregard the 1099-G for 2024, per box 2 instructions in https://www.irs.gov/pub/irs-pdf/i1099g.pdf. 

It isn't helpful to report it as a state grant (as the above response proposed), because it's not. It's a state tax credit reported in box 2, and that means the rules for SALT deductions can impact how much of it is actually taxable.

I haven't tackled the state return yet, per Amy's input above, so that may change my understanding.

[AmyC]

A state 1099-G for TY24 is potentially taxable income if you itemized and subtracted your state deductions in 2023. You are confusing years and instructions. Remember, you get your refund the year after you claimed the taxes deduction. IRS on state payments states: Taxpayers who itemize their deductions on their federal income tax returns and receive a state tax refund must include the refund in income only if they deducted the state tax paid. Because of the $10,000 limit on itemized deductions for state income and property taxes, some itemizers are not able to deduct all of the state taxes they paid and do not need to include a refund in income.

@srtaylor1317 

[srtaylor1317]

Amy,

Thanks for dialoguing on this. 

First, it looks like the screen you referenced in the state return is for ensuring the state of OK does not tax the parental choice tax credit, if it was added to federal income. 

At issue is how to recognize the credit on the federal return (and therefore taxation at the federal level). For myself, I will not be itemizing in 2024. The reference I was making earlier was to these instructions: "You are not required to furnish a copy of Form 1099-G or a substitute statement to the recipient if you can determine that the recipient did not claim itemized deductions on the recipient's federal income tax return for the tax year giving rise to the refund, credit, or offset." Since the PC tax credit is reported for year 2024 (box 1), and I will not itemize on my yet-to-be-filed 2024 return, my thinking is that I don't need to report it. But if I WAS to itemize in 2024, the question is HOW do I report it? @AmyC 

[RobertB4444]

If you did the prior year's tax return with TurboTax (along with the prior year's state return) AND you itemized deductions then TurboTax would prompt you to add the state tax refund that you received as income for the following year.  

If you did not prepare the prior year's tax return with TurboTax then you would enter the 1099-G under '1099-MISC and other common income'.  The first choice in that section is 'State and Local Refunds Reported on form 1099-G'.  

Either way, when entering the information into that section from your 1099-G TurboTax will ask you a whole slew of questions to determine whether your refund is taxable or not.

@srtaylor1317 

[srtaylor1317]

@RobertB4444,

You have given the exact instructions I have attempted to follow. However, the problem is that this screen only allows entries of 1099-G forms for years 2023 and earlier. I actaully got two 1099-Gs for the state of Oklahoma. The "regular" 1099-G for year 2023 (box 1), and the 1099-G for tax year 2024. However, the TT dialogue does not allow 2024 to be entered for a 1099-G. Any ideas?

[DawnC]

If you enter on the line below the state refund line (Other 1099-G Income), it will be taxable in 2024.   

[srtaylor1317]

While I can "force" the program to recognize the 1099 income using this area of turbotax, I'm not convinced that is the correct answer. The only way to add the 1099 income here is reporting it as income in one of the boxes other than box 2. However, this 2024 1099-G is clearly reporting the income in box 2....

[DawnC · Accepted solution]

You don't enter it on the 2024 tax return.   And if you do end up itemizing in 2024, you will enter it on next year's tax return.   Please disregard my previous message, as I see now, the Other 1099-G option was already well covered, my apologies.   

[Grace55]

But at the top of the form, it says 2024 and when I called the Oklahoma Tax commission they said it needed to be entered on the 2024 return because it was paid in 2024. 

[DawnC]

Is the amount in Box 2?  @Grace55  What year is in Box 3?   

From Publication 525 - If you received a state or local income tax refund (or credit or offset) in 2024, you must generally include it in income if you deducted the tax in an earlier year.   The payer should send Form 1099-G to you by January 31, 2025.   The IRS will also receive a copy of the Form 1099-G.   If you file Form 1040 or 1040-SR, use the worksheet in the 2024 Instructions for Schedule 1 (Form 1040) to figure the amount (if any) to include in your income.   See Itemized Deduction Recoveries, later, for when you must use Worksheet 2, later in this publication.  If you could choose to deduct for a tax year either: 

• State and local income taxes, or 

• State and local general sales taxes, 

then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you didn't choose to deduct for that year.