Received 1099-NEC for a district fee refund, no work performed

[dbz22]

I received a 1099-NEC for a $790 school district impact fee refund for a remodeling project at my primary residence. I paid the fee early on in the project but when I ended up canceling the remodeling project I applied for and successfully obtained the fee refund. They sent the refund via a paper check which I deposited. A few months later during tax document mailing season, I received the 1099-NEC from the school district.

Now when I'm doing my taxes via TurboTax, the 1099-NEC amount is causing my refund to go down. I assume it's being treated as income when it was really just a fee refund.  Maybe the school district had to give the refund this way in order to keep their bookkeeping numbers straight? I don't know ... but I definitely didn't do any work for them so I don't want to lose any of my refunds because of this. 

Does anyone have a suggestion on how to properly input this into TurboTax?

[Vanessa A · Accepted solution]

If this was just a refund of money you paid, then you would need to contact the school to have them retract this.  You should not have a 1099-NEC or any other tax documents from the school for receiving a refund. 

Since this was not income for you, you would not enter it on your return.  However, do keep records of your payment and refund along with the 1099 in case the IRS would contact you.