I spent a year in a recovery program in MA. My state returns ask if I’ve been incarcerated or spent time in a halfway house. Does that count?

The reference to being incarcerated refers to the commission of a crime. If you were commited to a halfway house because you did something unlawful, then you would probably have to answer yes.

Recovery would not be under halfway house, your recovery time should count as Rehab facility. There is a cat for this in medical expenses section.