What Form 1099-G Is For
Form 1099-G (2016) reports certain payments made by government agencies during the calendar year. Most people receive it if they have collected unemployment compensation or received a state income tax refund. The IRS requires agencies to issue this form to recipients by January 31 of the year following the year of the transaction. Taxpayers use it when filing a federal income tax return to report taxable income and determine if any overpayment, refund, or credit applies. If you’re filing late or submitting an amended return, you must still include all income from your 2016 Form 1099-G.
When You’d Use Form 1099-G (2016)
You’ll use this tax form when reporting unemployment benefits, state income tax refunds, or other taxable government payments for the 2016 tax year. The entire amount received must be reported as income, even if you later repay or adjust some benefits. If you filed late or amended your return, include this form so your federal income taxes are accurate. Most people can access their form online through their state’s labor department account, though a paper copy may also be mailed to your address in January.
Key Rules or Details for 2016
- Unemployment compensation: Unemployment insurance benefits received in 2016 are considered taxable income for federal tax purposes. You must report them on your federal tax return and pay any taxes owed.
- State income tax refunds: State income taxes refunded in 2016 are only taxable if you itemized deductions in the prior year. If you claimed the standard deduction, your refund is not taxable.
- Federal income tax withheld: If Box 4 on your form lists a withholding amount, it represents federal taxes that have already been paid and should be included on your return as a credit.
- Correcting or repaying benefits: If you repaid part of your unemployment compensation, report the correct total income after adjustments and note any repayments made to avoid overpaying.
- IRS Reporting and Deadlines: Agencies must file copies of Form 1099-G with the IRS by February 28 if submitted on paper, or by March 31 if submitted electronically.
- Fraud and identity theft: If you receive a 1099-G for benefits you didn’t claim, you may be a victim of unemployment fraud and should report it immediately.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Receive and review your form
By late January, verify your mail or online account for your 2016 Form 1099-G. Review your name, Social Security number, and payment details carefully to ensure accuracy.
Step 2: Identify payment boxes
Note which boxes contain information. Box 1 typically displays unemployment compensation, Box 2 shows state refunds, and Box 4 indicates federal income tax withheld. Keep these for your records.
Step 3: Determine if the income is taxable
Use IRS instructions to determine whether your unemployment benefits or refunds are taxable. Most unemployment benefits are taxable; however, certain payments may be exempt if they have been previously repaid.
Step 4: Report income correctly
Enter the amounts from your form on your federal income tax return. Include all benefits, refunds, and withheld federal taxes in their correct lines.
Step 5: Contact the agency if there’s an error
If you find incorrect information, contact the issuing department immediately and request an updated form. The easiest and fastest way to fix errors is by using the agency’s online portal.
Step 6: File your tax return
Use the information from your 1099-G to complete your return. Include all taxable payments and credits to ensure your federal taxes are accurate and avoid future penalties or interest.
Step 7: Keep copies for your records
Save a paper copy or digital version of your 2016 Form 1099-G with your tax records for at least three years. You may need it if the IRS sends a notice or bill regarding your tax return or income.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Forgetting to include unemployment compensation: Always report all unemployment income on your tax return to avoid an IRS notice or additional bill later.
- Reporting a non-taxable refund: Verify whether your state income tax refund is taxable by reviewing whether you itemized deductions on your prior-year return.
- Ignoring incorrect information: If your refund amount or unemployment payment is wrong, contact the issuing department immediately to request a corrected form before filing.
- Not checking for identity theft: If you receive a 1099-G but never applied for unemployment, report fraud to your state labor department and file IRS Form 14039 to protect your account.
- Overlooking withheld taxes: Always include the federal income tax withheld, as listed in Box 4, as a credit on your return to avoid overpaying.
- Failing to respond to IRS notices: If you get a notice about missing income, respond promptly with your records to avoid penalties and interest charges.
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 filing your federal tax return, the IRS verifies the information on your Form 1099-G against its records. If everything matches, your return process is normal, and a refund will be issued. If there’s a discrepancy or missing income, you may receive a notice requesting clarification. Respond quickly and include documentation if needed. If you corrected your form after filing, submit an amended tax return to ensure accurate reporting. Keep all related tax information for the 2016 tax year safely stored for future reference.
FAQs
What does Form 1099-G (2016) report for unemployment compensation?
It reports the total amount of unemployment compensation paid to you in 2016. This income is taxable and must be included on your federal income tax return.
Do I need to report unemployment benefits if I repaid some of them?
Yes, report the total amount received, but note the portion you repaid in the correct section of your tax return so your taxable income reflects accurate figures.
How do I report fraud or identity theft involving Form 1099-G?
If you received a 1099-G for benefits you didn’t claim, contact your state labor department immediately to report fraud. File IRS Form 14039 and visit IdentityTheft.gov for instructions.
What should I do if my Form 1099-G tax information is incorrect?
Contact the issuing agency right away and request an updated form. The easiest and fastest way to correct it is through your agency’s online access page or by calling their representative.
What does Box 4 on Form 1099-G mean?
Box 4 lists the total amount of federal income taxes withheld from your payments. This amount should be added as a credit on your federal tax return to reduce your total tax liability.
How long should I keep my 2016 Form 1099-G records?
Keep your tax records, including this form, for at least three years from the date you filed your return. You may need them if the IRS issues a notice or requests an audit.
