1099-MISC for homeowner incentive/ rebate for repairs- taxable income?

[skdukelaw123]

I saw a different post on here saying such a 1099 is not taxable income and should be entered as negative income, but everything else I see says this kind of rebate is taxable.  The post here (https://ttlc.intuit.com/community/taxes/discussion/re-is-a-1099-misc-city-rebate-taxable/01/3438924#...) has a TurboTax expert citing to an article which really isn't related.  Is there any authority for this being other than taxable income?

FYI, the incentive program by the City of Dallas provided a rebate for part of the cost of a foundation repair.   A 1099-MISC, listing the city's payment as "rental income", was issued.  The home is a primary residence and not a rental property.  Please provide a citation to the law supporting any answer given.  Thank you.

[skdukelaw123]

Any answers?

[Vanessa A]

It depends.  Unless it falls under the general welfare exclusion, disaster relief or has otherwise been specifically excluded from taxable income, most grants are considered taxable income.  So if this was just an incentive rebate and you did not have to prove need, it would be considered taxable income. However, the repair of a foundation wall would NOT be considered rental income, so you may want to contact the issuer of the 1099-Misc to get it corrected. 

Although this is discussing state payments, local grants would be treated the same. 

Federal Income Tax Consequences of Certain State Payments