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How do Oklahoma tax filers enter a 1099-G specifically related to the Parental Choice Tax Credit in the federal portion of "Wages & Income" in Turbotax?

Forum|Forum|1 year ago
January 22, 2025
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Within Turbotax, Box 2 in the 1099-G section is listed as a "Business or Farm Refund" whereas the Parental Choice Tax Credit is a state tax credit for private or home school tuition.

Best answer by jayohdee

Linking to this thread as it supplies the best answer.

https://ttlc.intuit.com/community/taxes/discussion/1099-g-for-2024-can-t-be-entered/00/3424675?relatedcontent=3157185

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Anonymous

Since The Parental Choice Tax Credit is a refundable credit, it is considered a state income or local tax refund, and will be reported under Refunds received for state/local tax returns.

Follow the instructions bellow to report your 1099-G:

TurboTax Online

From the Tax Home, select Income, and then +add income at the bottom.
Locate the Other Common Income section, and select the first option for Refunds received for state/local tax returns

TurboTax Desktop

From the Federal Taxes tab, select Wages and income
Locate the 1099-MISC and Other Common Income tab and select State and Local Tax Refunds on Form 1099-G

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jayohdeeAuthor

If this is the case then there is an additional problem.

On Turbotax online you must chose the tax year of the refund where 2023 is the latest option.

However Oklahomans received the tax credit in 2024.

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ThomasM125

The Parental Choice Tax Credit is really just a grant issued by the state, as it does not have a direct relation to your state income tax liability. As such, you should report it in the 1099-MISC section as mentioned by @3961294 . You should then choose the Taxable Grant option on the screen that says What Type of Payment Did You Receive?

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jayohdeeAuthorAnswer

Linking to this thread as it supplies the best answer.

https://ttlc.intuit.com/community/taxes/discussion/1099-g-for-2024-can-t-be-entered/00/3424675?relatedcontent=3157185

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Grace55

Has anyone accurately answered this or found a solution?
1099 for the parentalchoice tax credit cannot be entered in TurboTax because it should be listed under credit and tax year 2024 is not an option.

It should not be listed under tax grant or any of the other 1099G options because those are taxed. it would cause a reduction in refund/a higher tax burden.

It would make more sense if the tax year read as 2022, since 2022 was the tax year utilized for qualification review of whether or not you qualified for the tax credit. It should be recorded on the 2024 taxes, but it seems that the tax year in Box too should have said 2022. If you receive a state refund for overpaid taxes, you would notice that in tax year it shows 2023 but at the top it shows 2024. I’ve yet to find a solid answer, even after paying for the upgraded services. I would love to know if someone has something that is accurate and not just a work around solution.

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jayohdeeAuthor

@Grace55Because I chose not to itemize my deductions for this year's tax (2024) return, I was able to disregard the 1099-G amount as stated on the form itself.

My understanding is if you do itemize your deductions this year, then the amount received in Box 2 will be reported on next year's tax preparation as a state refund amount.

In other words say you receive a $100 refund from the State of OK this tax season (2024 return), you will report that as normal next year when preparing your 2025 tax returns plus whatever amount you received for the Parental Choice Tax Credit.

If you got the full PCTC amount of $7,500 then in my hypothetical scenario you would report a $7,600 ($7,500 + $100) state refund on next year's tax return.

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Grace55

Thank you. This is how I see this best also. I am itemizing this year and therefore all of the confusion for me.

so even though the 1099-G shows year 2024 in the top, since it’s for tax year 2024, I would file with my 2025 taxes and claim as a refund for 2024 (since I’m itemizing 2024)?

it’s made even more confusing because there is an option in the Oklahoma state tax form, when filing for 2025, where it asks how much of the refund listed in the federal portion was from the parental tax credit which led me to believe the state expects us to report it in our 2024 return since it wasn’t even available in 2023 or before.