I would think the TP would have to speak to the State UE people to get it resolved or at least a letter stating there were no benefits received.

Theoretically, the state should issue a corrected 1099-G (Good luck).  

I don't think there's anything you can do in ProSeries to identify the income and then back it out. I'd probably omit the income, put in a preparer note. Then have the documentation of fraud handy to answer the IRS letter when it comes...

Edit;  you may also consider attaching the 1099-G and documentation when e-filing