What Form 1099-G Is For
Form 1099-G (2010) reports certain government payments such as unemployment compensation, unemployment insurance benefits, and local or state income tax refunds. This tax form is issued by government agencies to individuals who received unemployment benefits or other payments during the calendar year. The Internal Revenue Service (IRS) uses this information to ensure that all income is reported properly. You must include the total amount shown on the form when filing your federal income tax return, even if you received only a paper copy.
When You’d Use Form 1099-G
You use Form 1099-G when filing your federal tax return to report unemployment compensation, state or local income tax refunds, or taxable grants. If you received unemployment insurance payments, these are considered taxable income and must be included in your federal taxable income. You also use this form if you itemized deductions on your previous year’s return and received a state income tax refund. For late or amended filings, include the correct tax information and request a corrected form if necessary.
Key Rules or Details for the 2010 Tax Year
- Full taxation of unemployment benefits: For the 2010 tax year, all unemployment compensation was considered taxable income and had to be reported on your federal income tax return.
- Withholding options available: Taxpayers can request that federal income taxes be withheld from their unemployment insurance benefits to avoid a large tax bill when filing.
- State and local tax refunds: State income tax refunds were only taxable if you claimed itemized deductions on your prior federal return. Standard deduction filers did not include them.
- Reporting by government agencies: Government agencies were required to issue Form 1099-G for total payments of $10 or more, including taxable grants or unemployment insurance benefits.
- New boxes for state tax withheld: The updated form included new boxes to display state income tax withheld, enabling taxpayers to determine the proper credits on their state government returns.
- Fraud and Identity Protection: Victims of unemployment fraud or identity theft are advised to report the incident immediately to the relevant department or labor agency and request that their records be corrected.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Review your Form 1099-G
When you receive the 1099-G form, check your name, address, and Social Security number for accuracy. Confirm that the total amount reported matches your unemployment benefits or state tax refund records.
Step 2: Combine all forms received
If you worked in multiple states or had different government payments, gather all your forms before filing. Each document contains specific tax information that contributes to your federal taxable income.
Step 3: Report unemployment compensation
Enter the total unemployment compensation shown in Box 1 of your 1099-G tax form on your federal income tax return. This amount is considered taxable income by the Internal Revenue Service.
Step 4: Determine if your state refund is taxable
Review Box 2 to determine whether your state income tax refund is taxable. If you claimed itemized deductions, report them as income on your federal return.
Step 5: Include tax withheld
Check Box 4 for federal income tax withheld. Add this to your total federal taxes paid during the year to reduce your tax liability or increase your refund.
Step 6: Keep a copy for your records
Store your paper copy of the 1099-G form with your tax records for at least three years. Keeping accurate records helps prevent penalties and makes amending your return easier if errors are reported later.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Not reporting unemployment compensation: Some filers overlook that unemployment insurance benefits are fully taxable. To avoid penalties, always include the total amount shown on your 1099-G tax form.
- Reporting a non-taxable refund as income: If you used the standard deduction instead of itemized deductions, your income tax refund is not taxable. Check your prior return before reporting.
- Forgetting federal taxes withheld: Failing to claim the amount in Box 4 means you overpay federal income taxes. Add this figure to your total federal payments on your tax return.
- Ignoring small payments: Even if the payment seems minor, government agencies are required to report them to the IRS. Always include your income to prevent a notice from the Internal Revenue Service.
- Failing to correct errors or report fraud: If you’re a victim of identity theft or unemployment fraud, contact your state department of labor and report fraud immediately to obtain a corrected form.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
After you file your federal income tax return, the IRS matches your reported income with the government payments listed on Form 1099-G. If the reported figures align, your return processes normally, and you’ll receive your refund or bill. Discrepancies may trigger a notice from the IRS or state government. Keeping all tax information accurate ensures the easiest and fastest way to access your refund or pay any outstanding overpayment balance.
FAQs
What should I do if I haven't received my 1099-G form?
If you received unemployment benefits but did not get your tax form, contact your state government or labor department to request a paper copy or digital version. You must still include this income when you file your federal return.
Are my 2010 unemployment benefits considered taxable unemployment compensation?
All unemployment benefits received in 2010 are considered taxable unemployment compensation by the Internal Revenue Service. You must report the total amount as income on your federal return.
How do I report fraud or identity theft related to unemployment benefits?
You should immediately report fraud or suspected identity theft to your state department. You should report fraud or suspected identity theft to your state Department of Labor and the IRS, and request a corrected Form 1099-G to ensure that only legitimate payments are recorded.
Does my 1099-G include state tax that was deducted from my benefits?
Your 1099-G form includes information about any state income tax withheld from unemployment payments. Use this data when computing itemized deductions or filing your state return.
How can I correct inaccurate tax information on my 1099-G?
If your form lists incorrect amounts or an outdated address, please contact the department that issued your benefits. Request a corrected 1099-G to avoid IRS penalties and filing delays.
What if I received multiple forms for government payments?
If you received several forms for unemployment insurance payments or income tax refunds from different states, total the amounts and include them as taxable income on your federal income tax return.
