Do I need to claim 1 time tax rebate of $260 from MN

On your federal return, YES.   On your MN state return, NO.    Enter the 1099-MISC using the instructions here.   Answer the follow-up questions as follows to ensure the income does not generate a self-employment schedule.  After you enter the form, you will be asked to describe what the payment was for.

1. Describe the reason for this 1099-MISC > MN tax rebate
2. Do any of these uncommon situations apply > None of these apply
3. Did the payment involve work like your main job > NO
4. How often did you get the payment > got it only in 2023
5. Did it involve an intent to earn money > NO
6. Do you have another 1099-MISC > NO

The amount will be added to ordinary income, and you will be able to subtract it out on your MN return - it is only taxable on the federal return, not your state return.    See MN - DOR.