What Form 1099-G Is For
Form 1099-G (2014) reports taxable income from unemployment compensation, state income tax refunds, and other government payments received during the 2014 tax year. The form is issued by state government departments or other government agencies to both the taxpayer and the Internal Revenue Service. Anyone who received unemployment benefits, a state tax refund, or taxable grants during 2014 must include these amounts on their federal income tax return. If you file late or need to amend your federal return, this tax form ensures that your reported income matches the information submitted to the IRS.
When You’d Use Form 1099-G
You’ll use Form 1099-G when preparing your 2014 federal tax return to report unemployment compensation or income tax refunds. Taxpayers who received unemployment insurance benefits or certain government payments should have received the form by mail or through an online portal in early 2015. If you did not receive your paper copy or if the total amount reported is incorrect, contact the issuing agency to request an updated form. Keep all records of unemployment benefits and government payments with your other tax information for at least three years.
Key Rules or Details for 2014
- Reporting threshold: State government agencies must issue Form 1099-G if they paid at least ten dollars in unemployment compensation or at least six hundred dollars in taxable grants or certain payments during the calendar year.
- Taxable unemployment compensation: All unemployment benefits received in 2014 are considered taxable income and must be reported on your federal income tax return. The total amount shown in Box 1 is included when computing itemized deductions and determining federal taxable income.
- State income tax refunds: State income tax refunds or local income tax refunds are taxable only if you itemized deductions on your prior federal tax return and received a tax benefit from the deduction.
- Federal and state tax withheld: Federal income taxes or state income tax withheld from unemployment payments are shown in Boxes 4 and 11. These amounts are considered prepaid taxes and should be included when you file your tax return.
- Repayments and corrections: If you repaid unemployment insurance benefits in 2014 or received a corrected form showing a new total amount, report the accurate figure and keep a copy of both forms for your records.
- Preventing fraud and identity theft: Always verify your Social Security number and address on the tax form to avoid identity theft or unemployment fraud. Report any suspected fraud to the issuing department or through the IRS report fraud channels immediately.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Review your 1099-G tax form
Check that your name, Social Security number, and address are correct. Confirm the total amount reported for unemployment compensation, taxable grants, and income tax refunds. If you notice an error, contact the issuing agency for a corrected form before filing.
Step 2: Determine what is taxable
Unemployment benefits and taxable grants are fully taxable. State income tax refunds may only be partially taxable depending on whether you itemized deductions on your previous federal return. Use the IRS worksheet in the 2014 Form 1040 instructions to calculate the taxable portion.
Step 3: Report the income on your federal tax return
Include unemployment compensation as taxable income on your Form 1040. Report any state tax refund as income only if you received a tax benefit in the prior year. Enter federal and state tax withheld in the payments section of your return to reduce your balance due.
Step 4: Keep supporting records
Maintain copies of your Form 1099-G, unemployment payment records, and any related correspondence from government agencies. Keeping organized tax records will help if the Internal Revenue Service requests verification or issues a bill for underreported income.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Failing to report unemployment benefits: Some taxpayers overlook the fact that unemployment compensation is considered taxable income. Always include the total amount received on your federal tax return to avoid penalties and interest from the IRS.
- Reporting non-taxable state income tax refunds: Do not include a state tax refund as taxable unless you itemized deductions in the previous year and benefited from them. Use the IRS worksheet to determine if any refund portion is taxable.
- Ignoring the amount of state income tax withheld: The amount shown in Box 11 represents state tax deducted from your benefits. Include it in your payments section to ensure your final tax bill or refund is accurate.
- Overlooking federal income tax withheld: If Box 4 lists federal taxes withheld from unemployment benefits, add that figure to your total payments on your return. Doing so reduces the taxes you owe and can increase your refund.
- Not verifying personal information: Incorrect Social Security numbers or addresses can cause identity theft or processing delays. Always verify your tax form before filing, and report any suspected fraud to the Internal Revenue Service immediately.
- Discarding older forms too soon: Keep all unemployment compensation records, government payment details, and copies of your 1099-G forms for at least three years, in case of an audit or correction request.
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 tax return, the Internal Revenue Service compares the amounts you reported with information received from government agencies. If your reported unemployment compensation or state income tax refunds do not match the IRS records, you may receive a notice requesting correction or payment. Accurate reporting ensures faster refund processing and helps prevent penalties. E-filing remains the easiest and quickest way to ensure your federal return and related forms are correctly received and processed.
FAQs
What should I do if I have never received my 1099-G form?
If you received unemployment compensation or a state income tax refund but did not receive a Form 1099-G, contact your state labor department or tax agency. You can often access the tax form online using your claimant ID or request a paper copy by mail.
How do I report state tax refunds listed on Form 1099-G?
State income tax refunds may be taxable depending on whether you itemized deductions on your previous federal tax return. Use the worksheet provided in the 2014 IRS instructions to determine how much of the refund is taxable.
What if I believe my Form 1099-G was used in unemployment fraud?
If you suspect someone filed a fraudulent unemployment claim using your name or Social Security number, report fraud immediately. Contact both your state unemployment office and the Internal Revenue Service to request a corrected 1099-G tax form.
What type of government payments are listed on the 1099-G form?
The 1099-G form reports various government payments, including unemployment insurance benefits, state income tax refunds, and taxable grants. Each payment type may affect your federal taxable income differently depending on your specific tax situation.
Where can I find accurate tax information about my 1099-G?
For reliable tax information, visit the Internal Revenue Service website at IRS.gov or your state government tax department site. These resources explain how to file, determine what income is taxable, and request corrected forms if needed.
