This is reported on your federal return under 1099-G under Other Common Income, Other 1099-G Income. This is taxable income on your federal return.
But this is not taxable on your state return. As you prepare your state return, on the screen Here's the income that California handles differently scroll to Home, and start Seismic Improvements Incentives.
Then on Enter Financial Incentives for Seismic Improvements, enter the amount from your 1099-G that you included on your federal return.
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