Is a 1099-misc city rebate taxable?

If you received a 1099-MISC from Los Angeles for a sidewalk repair rebate, its taxability depends on its purpose. The rebate isn't taxable if it reimburses out-of-pocket expenses with no prior tax benefit (e.g., no deduction claimed). However, it's taxable if it reimburses expenses previously deducted (e.g., for business or rental property purposes) and must be reported. ‌See article on taxable vs. nontaxable income.

Steps to enter the 1099-MISC as nontaxable (if appropriate)  in TurboTax:

1. Open your TurboTax return.
2. Click on the "Income" section.
3. Click "Add Income" and select "Form 1099-MISC.
4. Go back to the Income section and enter the details from your 1099-MISC exactly as they appear.
5. When prompted to describe the reason for the 1099-MISC, enter "Sidewalk Repair Rebate".
6. Navigate back to the "Income" section.
7. Click "Add Income" and scroll to "Less Common Income".
8. Then select "Miscellaneous Income.
9. Go back to the Income section and choose "Other reportable income.
10. "Enter a description like "Sidewalk Repair Rebate" and input the rebate amount as a negative number (e.g., "-$10,000").