One time relief from inflation has nothing to do with it. The fact it was based on your 2020 return and is called a tax refund means it could be a tax refund. F...
If that were the case, they would have called it a one time tax relief and given everyone the same amount. However, they call it a refund and base the amount on...
Then go to Schedule 1 line 24z and put in the negative value of the refund. Add description that it is not taxable since you took standard deduction and receive...
Don't put it past the state of California to issue it on the wrong form. Since they didn't have IRS guidance they issued it on 1099-MISC. It's still a refund.
