How to enter your NYS Inflation Check <<< I figured it out! >>>

[user17701539135]

It took me weeks to finally figure this out! Once you enter your numbers, go to Tax Tools > Tools > View your 1040. The Refund check will be there and the amount will be transfered to all correct areas for federal!

STEP BY STEP – NY INFLATION REFUND CHECK IN TURBOTAX (1099-G)

1. Open your return in TurboTax.

2. Go to Federal.

3. Go to Wages & Income.

4. Depending on where you're at click:
   a. '+ Add more income' and then/or
   b. 'Refunds Received for State/Local Tax Returns'
   c. Click 'Add' or 'Revisit'

5. At 'Did you get a state or local tax refund in 2025?' click YES

6. When asked about the refund you received in 2025, enter:
   State: New York
   Tax return year: 2023
   Payments and withholding: 0
   Refund amount: enter full amount for MFJ or ONLY YOUR SHARE if half of the total amount on the 1099-G

7. Continue.

8. You will see the question:
   “Does either apply to your 2023 New York return?”
   Even though you took the standard deduction, select:
   NO

Why do we select NO?

We selected NO because the NY inflation refund is not a normal tax refund, and choosing NO forces TurboTax to include it in federal income while subtracting it from New York tax, which is exactly what NY requires.

8. TurboTax will then ask:
“Tell us the taxable amount of your refund”

9. Enter the dollar amount of the refund. Click Continue.

10. Continue through the rest of the Federal section.

11. Now go to State and complete your New York return as normal.

12. For federal confirmation, open your 1040.

13. Look at Line 8z (Other income).
14. You should see your half (or all) of the refund included there.

15.If Schedule 1 line 8z includes it AND IT-201 line 25 subtracts it, everything is correct.

---

KEY POINTS TO REMEMBER

The check is based on 2023 income but taxed federally in the year received.
TurboTax explanations about 2024 are generic and can be ignored.
Do not split any other way.
Do not enter it as Other Income directly.

To confirm:

Where it shows up on the federal 1040

On the 2025 Form 1040, the inflation refund shows up as “Other income.”

Look at:

Schedule 1 (Form 1040)
➡ Part I – Additional Income
➡You'll see your refund amount in Schedule 1, line 10
➡ Form 1040, line 8 (via total income)

To really confirm:

1. Look at your Federal and State returns BEFORE you do all this, and then once youre done. Your FEDERAL will go down by the amount of your tax bracket.

This one is for the history books!!! Share this with as many people as you can : )

[v8899]

Thanks. This workaround works, but 99.9% of taxpayers will not do this because it requires you to answer incorrectly to questions regarding the standard deduction in 2023. 

TurboTax really needs to release another update to make this straightforward for people to enter. 

[MonikaK1]

Here's another option we've shared:

Because the special New York Inflation Refund is not a regular tax refund but a special payment that is taxable at the Federal level, you can report it instead in Other Reportable Income. In TurboTax Online:

• From the left menu, go to Federal and select the first tab, Wages & Income
• Add more income by scrolling down to the last option, Less Common Income, and Show more
• Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
• Choose the last option, Other reportable income and Start and Yes
• Enter the applicable description and amount and Continue
   

If you need to subtract an item of income from your New York return that was included in your Federal return income, you can enter that adjustment in TurboTax Online at the screen in your New York return labeled "Changes to Federal Income".  

Look under Other New York Adjustments to Federal Income, and select Start next to Other changes (adjustments) to your federal income to make the subtraction entry.

@user17701539135 

@v8899 

[user17707668045]

I agree. I saw something about a new release coming out on February 12th? Also, lots of people complaining about that their New York State tax was rejected because of all this? 

[v8899]

Might be a good idea to wait to file a few more weeks, in case more guidance gets released. In the past years IRS issued guidance for these types of relief checks. 

[KrisD15]

Of course you can wait, but since the "refund" is not based on any tax, it seems very unlikely that the IRS will change their stance on the income being taxable on the federal return. 

The 1099-G for the New York State Inflation Refund Check can be entered as a New York State refund in the TurboTax program.

• Income
  Other Common Income
  State and Local Tax Refunds on Form 1099-G   START or UPDATE
• Select the "Tax return year" on the "Tell us about the refund you received in 2025" as TAX YEAR 2023
• Enter zero for "Payments and Withholding"
• Enter the amount that you received which is reported on that 1099-G
• Select NO for the "Let's check if your 2023 New York refund is taxable" screen
• Once the NO radio button is selected a drop-down opens and you can enter the taxable amount which is the full amount reported on that 1099-G.

If you also receive a 1099-G for a 2024 state tax refund, that can be entered separately from this 1099-G.  You will attribute the "inflation refund" check to tax year 2023 and the State refund (if you received one) to tax year 2024.

This is the first year New York has issued a payment like this.
There is no one dedicated screen to enter this 1099-G in the TurboTax program.

Technically the New York State Inflation Refund Check is NOT a refund of tax. It is similar to an Earned Income Credit in so far as it is based on the Taxpayer's income, in this case their 2023 income, regardless of whether they itemized or used the standard deduction.

It is not taxable on the state return, but is taxable on your federal return.

Some answers you give the program are answers to make the program put the numbers where they need to go, they are not answers that are transmitted to the IRS.

The amount of the New York State Inflation Refund Check will be reported on Schedule 1.

The total on Schedule 1 is carried forward to Form 1040 line 8. 

Here is a link explaining the New York State Inflation Refund Check

Here is a link explaining the federal taxability of the check
 

[v8899]

I don’t think it’s so clear cut. See this discussion for example:  

https://www.taxprotalk.com/forums/viewtopic.php?f=8&t=35598

Anyway I don’t mind paying tax on the $400, it’s really not that much. I just hope TurboTax makes an update to handle this properly so people are not guessing.

[user17707668045]

I think everyone is missing the point. I don't want to do all this and get stuck when NY rejects my return. I spoke to someone from Turbo Tax and they didn't have a clue how to do this properly. I called the IRS and they said its a NY problem. I called NYS and the said to manually update lines 19 and 25. You'll have to call Turbo Tax or the IRS about Federal. Everyone keeps passing the buck. The NY guy even said try HR Block software. There are differences between the desktop version and the web-based version. Supposedly, something was "fixed" on the web-based version on Feb 5th? Has ANYONE successfully entered their NY State Tax Relief as a second 1099-G and able to have it flow through properly and be accepted by NY using the DESKTOP version??

[kooolerking]

I am not comfortable trying to fake-out TurboTax with the suggested work-around as I think it may trigger audit or error problems down the road. The "Inflation Refund" payment was received in the 2025 Tax year, regardless of the tax year figures NY State used to calculate it.

The specific issue is that as of the current update, TurboTax 2025 limits 1099-G entries to categories not fitting the NY State "Inflation Refund" payment which is NOT any of the following;

• unemployment
• a state or local tax refund
• a grant
• a business / farm refund
• an Agricultural payment
• etc.

At this point, without "fudging" on the TT software entries, there seems to be no way to correctly enter this 1099-G amount to have it taxed on the Federal but not on the State for the tax year 2025.

When is Intuit expected to be updating TT 2025 to fix this hole in the software?

[MonikaK1]

It often happens that a state will issue a payment to help taxpayers that is not taxable to that state, but taxable on the Federal return. These change from year to year and may even change during the filing season. For 2025, the special New York taxpayer assistance payment is nontaxable to New York but taxable on the Federal return.

Because the special New York Inflation Refund is not a regular tax refund but a special payment that is taxable at the Federal level, you can report it instead in Other Reportable Income. In TurboTax Online:

• From the left menu, go to Federal and select the first tab, Wages & Income
• Add more income by scrolling down to the last option, Less Common Income, and Show more
• Scroll down to the last option, Miscellaneous Income, 1099-A, 1099-C and Start
• Choose the last option, Other reportable income and Start and Yes
• Enter the applicable description and amount and Continue
   

If you need to subtract an item of income from your New York return that was included in your Federal return income, you can enter that adjustment in TurboTax Online at the screen in your New York return labeled "Changes to Federal Income".  

Look under Other New York Adjustments to Federal Income, and select Start next to Other changes (adjustments) to your federal income to make the subtraction entry.

@kooolerking 

[kooolerking]

Thanks for the reply, however, that method does not work very well as it initially gets taxed for both the Federal and NY State. Then, manually "fixing" the NY State portion as an adjustment in the NY State filing is a rather awkward work-around. Additionally, such a manual entry loses the detail of the NY State issued 1099-G and adds a lot of manual work that could lead to error or trigger an audit.

Why not simply add an "Other 1099-G" category that allows the flexibility to enter the various 1099-G box values, as well as, check boxes for the various situations such as "not taxable for State / local" , etc. and apply it automatically to the Federal and State forms? Such an approach should be flexible enough to address the year-by-year and state-by-state changes and variations that you mention.

[shmeyers1]

Thanks for your research and step by step input directions for posting the New York State Inflation Adjustment check for federal and NY purposes. Much appreciated.

[gafuller123]

I called Turbo Tax today and was told if you didn’t itemize this year or in 2023, and took the standard deduction, you don’t need to add the inflation check anywhere.  He said you only need to list it if you itemize.  I wish they’d release official information on this.

[BrooklynJeff]

Thanks.  I would certainly like to have that in writing!

That would certainly makes sense  if this is a tax refund and i did not previously take a deduction against it.   What business is it of Uncle Sam if NY wants to charge me less tax?

But what do I know ...

[KrisD15]

The issue is that the "Inflation Refund" is not refunding you tax, it's based on your 2023 income, but not on your tax, and not on any tax that you paid or claimed on any previous tax returns. 

In my opinion it needs to be claimed regardless of whether you took the Standard Deduction or Itemized. 

"The 1099-G for the New York State Inflation Refund Check can be entered as a New York State refund in the TurboTax program.

• Income
  Other Common Income
  State and Local Tax Refunds on Form 1099-G   START or UPDATE
• Select the "Tax return year" on the "Tell us about the refund you received in 2025" as TAX YEAR 2023
• Enter zero for "Payments and Withholding"

Enter the amount that you received which is reported on that 1099-G

Select NO for the "Let's check if your 2023 New York refund is taxable" screen

Once the NO radio button is selected a drop-down opens and you can enter the taxable amount which is the full amount reported on that 1099-G.

If you also receive a 1099-G for a 2024 state tax refund, that can be entered separately from this 1099-G.  You will attribute the "inflation refund" check to tax year 2023 and the State refund (if you received one) to tax year 2024.

This is the first year New York has issued a payment like this.
There is no one dedicated screen to enter this 1099-G in the TurboTax program.

Technically the New York State Inflation Refund Check is NOT a refund of tax. It is similar to an Earned Income Credit in so far as it is based on the Taxpayer's income, in this case their 2023 income, regardless of whether they itemized or used the standard deduction.

It is not taxable on the state return, but is taxable on your federal return.

Some answers you give the program are answers to make the program put the numbers where they need to go, they are not answers that are transmitted to the IRS.

The amount of the New York State Inflation Refund Check will be reported on Schedule 1.

The total on Schedule 1 is carried forward to Form 1040 line 8.  

Here is a link explaining the New York State Inflation Refund Check

Here is a link explaining the federal taxability of the check