This sounds a little sketchy to me, as well.
If this was a reimbursement of after-tax funds you overpaid, you can eliminate the tax effect by entering an offsetting "cost in "other Income.
To report the 1099-MISC "income" (you've already done this):
- Enter
the 1099-Misc in the Other Common Income section (Enter
"1099misc" in the Search Box and Select "Jump to
1099misc")
- Indicate
that it is a "Reimbursement for Overpayment", that it does not involve work like your main job,
and that it did not involve
an intent to make money, and is not a
recurring payment (received in the past or expected in the
future).
The "income" will be reported on line 21 of your return (already done).
To enter the "cost":
- Go
to Less Common Income, Miscellaneous Income and Other reportable income
(enter "other reportable income" in the Search Box and Select
"Jump to other reportable income")
- Continue
to the screen "Other Taxable Income". Enter the description
as "Overpayment" and the amount as a negative
number. These are NOT wages.
A corresponding negative amount will be entered, and
line 21 will be zero. See the attached screenshot example (different
descriptions, but still offsetting).
This is the correct way to report a reimbursement. Chase is not likely to issue a corrected 1099-MISC.
