My apartment returned my security deposit but also sent me 1099-NEC. It shouldn't be counted as income and taxable . What should I do?

A return of a security deposit is not income.  I suggest that you request they issue a corrected form 1099NEC to you and the IRS for $0.  Or you can report the form 1099NEC and remove it from the return by putting the amount as a negative number in Other Income with a Description like "Rent Security Deposit Returned".

 

You can also omit the Form 1099Nec and address it if it ever arises with the IRS.

 

If you decide to enter the form 1099 then remove the amount, here are steps to follow.  Remember to enter the amount as a negative number like -$1230.00.

 

1. Sign in to your account, select Pick up where you left off.
2. To the right upper corner, in the search box, type in "other reportable income" and Enter.
3. Select Jump to other reportable income.
4. Next screen, Other Wages Received, select No to continue