Form 1099-G (2011) Filing Guide and Requirements Checklist

Federal, state, and local government units use this form to report unemployment compensation, state or local income tax refunds or credits or offsets, reemployment trade adjustment assistance payments, taxable grants, and agricultural payments. Recipients use the information on Form 1099-G to prepare their federal income tax returns and determine their correct tax liability for the year.

Unemployment Compensation Reporting

Verify the Box 1 unemployment compensation amount against all Forms 1099-G you received for 2011. Report the combined total from multiple payers on Form 1040, line 19, and include the full Box 1 amount as income on your return. Special rules apply if you made contributions to a

governmental unemployment program

• You may deduct your contributions on Schedule A as taxes paid if you itemize

deductions.

• You must still report the full Box 1 amount as taxable income on Form 1040, line 19.
• The deduction for contributions does not reduce the amount you report as

unemployment income.

• Separate Forms 1099-G are issued for payments from contributory programs such as

government-paid paid family leave programs.

State and Local Tax Refunds

Check Box 3 to determine which prior year's tax return the state or local income tax refund in

Box 2 relates to. When Box 3 is blank, the refund applies to 2010 taxes paid in that year.

You must report Box 2 as taxable income only if you deducted state or local income tax paid in the year identified in Box 3 on that year's Schedule A, and the refund remains non-taxable if you

claimed the standard deduction in that year. Review Box 8 to confirm whether the refund applies exclusively to trade or business income rather than general income taxes.

Federal Income Tax Withholding

Box 4 shows backup withholding or withholding you requested on unemployment compensation,

Commodity Credit Corporation loans, or certain crop disaster payments. The backup withholding

rates for 2011 vary by payment type

1. Payments in Box 6 (taxable grants) or Box 7 (agriculture payments) are subject to backup withholding at 31 percent.

2. Other reportable payments generally face backup withholding at 28 percent.

3. Voluntary federal withholding on unemployment compensation appears in Box 4 when you requested it.

4. State income tax withholding is not reported to the IRS but appears in Box 11 for state filing purposes.

Include any amount shown in Box 4 on your income tax return as tax withheld.

Trade Adjustment Assistance Payments

Box 5 shows combined payments of $600 or more for Alternative Trade Adjustment Assistance and Reemployment Trade Adjustment Assistance programs. ATAA payments were made under the Demonstration Project for Alternative Trade Adjustment Assistance for Older Workers.

RTAA payments were made under the Reemployment Trade Adjustment Assistance program.

Report the total amount from Box 5 on Form 1040 on the "Other income" line following the instructions for that form.

Taxable Grants and Agricultural Income

Box 6 reports taxable grants of $600 or more from federal, state, or local programs that provide subsidized energy financing or grants for energy conservation or production projects. The box also shows taxable grants administered by Indian tribal governments and other taxable grants.

Box 7 shows Department of Agriculture payments made during 2011.

Agricultural payment reporting depends on your business structure

• Individual farmers report Box 7 amounts on Schedule F (Form 1040).
• Partnerships report Box 7 amounts on Form 8825 for rental real estate income.
• Nominees who received payments on behalf of others must file Form 1099-G showing

the actual owner and the payment amount.

Additional Reporting Items

Box 9 shows the market gain associated with the repayment of a Commodity Credit Corporation loan, whether you repaid it using cash or CCC certificates. Report this amount on Schedule F following the instructions for that form.

Boxes 10a through 10b show state identification information, and Box 11 shows state income tax withheld from unemployment compensation payments. Report Box 11 state income tax withheld on your state return if your state's filing rules require it.

Interest Income on Refunds

Payers must file Form 1099-INT if they paid interest of $600 or more on a state or local income tax refund. For interest payments of less than $600, the payer may include the amount in the blank box on Copy B of Form 1099-G with an appropriate designation such as "Interest

Income." You must report all interest received as income on your federal tax return, regardless of whether the payer issues Form 1099-INT or includes the amount on Form 1099-G.

Record Retention and Filing Requirements

Retain Form 1099-G Copy B in your records for substantiation purposes. You do not need to attach Form 1099-G to your Form 1040 when filing a paper return.

The payer files Copy A directly with the IRS. Keep your copy with your tax records in case the

IRS questions the income you reported.

Payer Filing Obligations

Government units must file Form 1099-G for the following payment types

• Unemployment compensation of $10 or more
• State or local income tax refunds, credits, or offsets of $10 or more
• Combined ATAA and RTAA payments of $600 or more
• Taxable grants of $600 or more
• Agricultural subsidy payments during 2011

The officer or employee having control of the payments, or a designated officer or employee, must file the form. Payers must obtain the recipient's correct taxpayer identification number to avoid backup withholding requirements and potential penalties for failure to file correct information returns.

Required Box Completion

Enter unemployment compensation amounts in Box 1, including Railroad Retirement Board payments for unemployment and payments from contributory programs deemed to be unemployment compensation. Enter state or local income tax refunds, credits, or offsets of $10 or more in Box 2.

Enter the four-digit tax year in Box 3 to indicate the tax year for which the Box 2 refund applies, using the format "YYYY." No entry is required if the refund is for 2010. Report refunds for multiple tax years on separate forms.

Withholding and Distribution Deadlines

The filing and distribution deadlines for Form 1099-G in 2011 are

1. Furnish Copy B to recipients by January 31, 2012.

2. File Copy A with the IRS by February 28, 2012, if filing on paper.

3. Electronic filers must submit Copy A by April 2, 2012.

4. Electronic filing requires software that generates files according to Publication 1220 specifications.

Submit paper forms with Form 1096 as the transmittal document to the appropriate IRS Service

Center.

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