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06. I claimed a Maine refund on my last year’s Maine return, but Maine Revenue Services applied the money to a bill for another year. Doesn't that mean this 1099 form is wrong? Do I still have to report this as income?

The 1099 form is not wrong; you must still report the overpayment as income. The application of the refund to another balance doesn't change the fact that you had an overpayment for the year on your tax return. Even though you didn't actually receive a check, an overpayment transaction took place, and you are subject to the same federal reporting requirements as if you had received a refund check.