Your first mistake is asking intelligent questions about stupid answers.  IRS is not offering amnesty, they are offering amnesia.  Just forget about all this.  

But the way I read it, the income tax rebate is "general welfare" and not taxable.  So the 1099-G is correct. It's the property tax rebate that might be taxable, if a tax benefit was derived from claiming property taxes as an itemized deduction.  I don't think you have to fill out a worksheet for that, just report it on the "other income" line. Schedule 1, line 8z, not line 1. 

People got the $50 "income tax rebate" even if they didn't pay any income tax, right?  And they didn't get it, even if they paid a lot of income tax because their income was more than $200K, right?  So it's a Robin Hood Rebate.  Take income tax from the rich, give it to the poor.