Form 1099-G: Certain Government Payments (2019) – A Complete Guide

If you received unemployment benefits, a state income-tax refund, or certain other government payments in 2019, you likely received Form 1099-G. Government agencies send this form to you—and to the IRS—to report specific payments that can affect your federal return. This plain-English guide explains what’s on the form, when amounts are taxable, where to report them, and how to fix common problems.

What the form reports

Form 1099-G (“Certain Government Payments”) is issued by federal, state, or local agencies to report:

• Box 1 – Unemployment compensation. State unemployment benefits, RRB unemployment, and certain state programs.
• Box 2 – State or local income-tax refunds, credits, or offsets.
• Box 4 – Federal income tax withheld. (Voluntary withholding on unemployment; backup withholding for other payments.)
• Box 5 – RTAA payments.
• Box 6 – Taxable grants.
• Box 7 – Agriculture payments.
• Box 9 – Market gain on CCC loans. (If applicable.)
• Box 3 – Tax year of the refund. (For Box 2, if not the current year.)

You don’t attach the form to your return. Use it to prepare your 2019 Form 1040; the IRS already has a copy.

Deadlines & late/corrected forms

• Agencies were required to furnish 1099-G by Jan 31, 2020 (for 2019).
• If you filed before receiving it, or later receive a CORRECTED 1099-G, amend with Form 1040-X if your tax changes.
• Filing late for 2019? Still use the 2019 1099-G amounts for that year’s return.

What’s taxable—and what isn’t

Unemployment compensation (Box 1)

• Generally taxable for federal income tax purposes.
• Report on Schedule 1 (Form 1040), Additional Income, line for Unemployment compensation (2019). It flows to Form 1040.

Tip: If Box 4 shows federal withholding, claim it with your other federal withholding on Form 1040.

State/local income-tax refunds (Box 2)

• Taxable only if you itemized deductions in the prior year and received a tax benefit from deducting state/local income taxes.
• If you took the standard deduction on your 2018 return, your 2019 state refund is generally not taxable.
• If taxable, include on Schedule 1 (Form 1040), Additional Income (2019). Use the 1040 instructions worksheet (recovery rule).

RTAA (Box 5), taxable grants (Box 6), agriculture payments (Box 7)

• Generally taxable. Report in the area of the return indicated by the program type (often Schedule 1 “Other income,” or a business/farm schedule if applicable).

CCC market gain (Box 9)

• Report per farm/commodity rules (often Schedule F considerations).

Where to report (2019)

• Unemployment compensation: Schedule 1 (Form 1040) – “Unemployment compensation.”
• Taxable state refund: Schedule 1 (Form 1040) – “Other income” (per 1040 instructions).
• Federal tax withheld (Box 4): Form 1040 – “Federal income tax withheld.”
• RTAA / taxable grants / ag payments: Per program—often Schedule 1 “Other income,” Schedule C, or Schedule F.

(Exact line numbers can shift year-to-year; for 2019, use the labeled unemployment/other-income lines on Schedule 1 and the “federal tax withheld” line on Form 1040.)

Quick decision flow: Is my state refund taxable?

1. Did you itemize on your 2018 federal return?

• No → Refund not taxable for 2019.
• Yes → Go to 2.

2. Did your 2018 itemized deduction for state/local income tax actually reduce your 2018 federal tax?

• No (e.g., limited by SALT cap or AMT) → Refund not taxable to the extent no tax benefit.
• Yes → Refund taxable to the extent of the prior-year tax benefit (use the worksheet in 2019 1040 instructions).

Step-by-step (high level)

1. Check the form. Verify your name/SSN and amounts (Boxes 1–2 & 4 especially).
2. Decide what’s taxable.
   • Box 1: include in income.
   • Box 2: run the recovery worksheet if you itemized in 2018.
3. Report in the right place. Use Schedule 1 categories; carry totals to Form 1040.
4. Claim withholding. Add Box 4 to your total federal withholding on Form 1040.
5. Keep everything. Retain the 1099-G and support for at least three years.

Common mistakes (and easy fixes)

• Skipping unemployment income. The IRS matches 1099-G; always report Box 1.
• Automatically taxing state refunds. Only taxable if you itemized in 2018 and got a tax benefit.
• Using the wrong year. Box 3 shows the tax year the refund relates to; you still report it in 2019 (the year you received it).
• Missing withholding credits. Don’t forget Box 4 on Form 1040.
• Reporting fraud/identity-theft 1099-G amounts. If you didn’t receive the funds, contact the agency and get a corrected form; don’t include phantom income.
• Not allocating multi-year estimated payments. If your refund ties to payments spread across years, use the allocation rules (Publication 525) to determine the taxable portion.

Two bite-size examples

1) Unemployment with withholding

• Box 1 = $8,400; Box 4 = $840 (voluntary 10%).
• Report $8,400 as unemployment income on Schedule 1.
• Claim $840 with other federal withholding on Form 1040.

2) State refund recovery

• You itemized in 2018 and deducted $8,000 of state income tax (subject to SALT limits).
• In 2019 you received a $900 state refund (Box 2).
• Use the 2019 1040 worksheet to determine how much of the $900 produced a 2018 tax benefit; only that portion is taxable in 2019.

What happens after you file

• IRS matching. The IRS compares your return to 1099-G filings.
• If there’s a mismatch: You may receive a CP2000 notice proposing changes. Respond by the deadline—agree and pay, or explain with documentation (e.g., corrected 1099-G, recovery worksheet).
• Processing & records. Refunds process normally if amounts match. Keep your 1099-G and computations at least three years.

Fast FAQ

• Is unemployment taxable? Yes, for federal income tax. Not subject to Social Security/Medicare.
• I used the standard deduction in 2018. Is my 2019 state refund taxable? Generally no.
• Got a corrected 1099-G after filing? File Form 1040-X if the change affects your tax.
• Can I withhold tax from unemployment? Yes—Box 4 will show federal withholding you can claim.
• Received a 1099-G for benefits you didn’t collect? Contact the agency for a corrected form; don’t report income you didn’t receive.

One-page checklist (print/save)

• ☐ Collected all 2019 Forms 1099-G (check state portals if missing)
• ☐ Verified SSN/name and amounts in Boxes 1–2 & 4
• ☐ Unemployment (Box 1): Included on Schedule 1 (Unemployment compensation)
• ☐ State refund (Box 2):
  • ☐ I itemized in 2018? If yes → ran recovery worksheet
  • ☐ Reported only the taxable portion on Schedule 1 (Other income)
• ☐ Withholding (Box 4): Claimed on Form 1040 with other federal withholding
• ☐ Other boxes (5–7, 9): Reported per program (Schedule 1/C/F as applicable)
• ☐ Kept 1099-G, worksheet(s), and support in my tax file (≥ 3 years)

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