1099-G for 2024 can't be entered

[MayaD]

If all three of the following are true, your refund (or part of it) counts as taxable income:

• You itemized deductions last year, instead of taking the standard deduction.
• You claimed state and local income taxes (not general sales taxes).
• Claiming the deduction helped you increase your federal refund or lower your tax bill.

When you enter your information and answer the questions, TurboTax will calculate the taxable amount. 

If you transferred last year’s tax data to this year's return, your state and local refunds are automatically brought over with your other tax info.

If not, enter your 1099-G form:

1. Go to wages and Income
2. Go to Other Common Income
3. Select Refunds Received for State/Local Tax Returns

[jessicawright]

Which brings me back to the original problem. The 1099G had tax year 2024 in box 1 and TurboTax will not allow

me to enter it. 

[srtaylor1317]

There are multiple threads that address the challenges you’ve outlined. The reality is no one knows for sure. For myself, I am planning to sit on the 1099-G for a year and report it next year, which is when a 1099-G 2024 would typically be issued. I’m guessing the IRS matching software won’t even look for it until then. I plan to continue watching for news and rulings on this topic and will amend my return if needed. 

[Bi11iard]

@KrisD15 

It is more to share information and to clarify what the tax experts have posted, which is conflicting information. This is not a taxable grant.  The Parental Choice Tax Credit (PCTC) is not a tax refund. It is not income. This is a tax credit, paid to the school, not to the individual.  I contacted the Oklahoma Tax Commission, and they confirmed to me that this is NOT reportable on my state income tax. I also fail to see where this would ever be reportable on a Federal return, even if you did itemize.

[srtaylor1317]

It’s an odd situation, but basically the rules of tax credits are that they CAN be federally taxable IF you itemize in a particular year and deducted that year’s withholding from your income (when you itemized). 

Basically this ensures money that you deducted from federal taxes is added back to your income in a later year if you get it back from the state.   

what is “odd” is that you could end up being taxed for a far larger amount than you ever had withheld in the first place. Basically, this is a byproduct of the legislature wanting to use the language of tax credits instead of education savings accounts. Having spoken with a number of people involved in the original legislation, I can assure you this is an unintended consequence, and not by design.

if the IRS confirms that this is federallytaxable in the future, it will change the calculus of whether or not people who itemize should take the state income tax or state sales tax as a deduction. Happy for the experts to correct me if I am miss-stating anything here.