2017 Form 1099-G Checklist: Certain Government Payments
Purpose
Form 1099-G reports unemployment compensation, state and local income tax refunds, reemployment trade adjustment assistance payments, taxable grants, and agriculture payments to recipients and the IRS. For 2017, payers must issue Copy B by January 31, 2018, and file Copy A with the IRS by February 28, 2018, or April 2, 2018, if filing electronically.
Box 3 identifies the tax year for which Box 2 refunds were issued; no entry is required if the refund applies to 2016 taxes. Backup withholding rules on unemployment and Commodity Credit Corporation loans remain in effect per Form W-9 requirements at the 2017 rate of 28 percent.
Payer Filing Steps
Obtain Scannable Copy A Forms
Do not print Copy A from the IRS website because only official printed versions are scannable. Penalties may apply for non-scannable Copy A filings submitted to the IRS. Order forms from IRS.gov/orderforms under Employer and Information Returns, or file electronically using the FIRE or AIR systems.
Enter Payer and Recipient Information
Enter the payer's federal identification number and complete the payer address block, including city, state, ZIP code, and telephone number on all copies. Report the recipient's identification number, which may be a social security number, individual taxpayer identification number, adoption taxpayer identification number, or employer identification number.
For 2017, Copy B furnished to the recipient may display only the last four digits of the identification number as a privacy safeguard. The complete number must be reported to the IRS on Copy A regardless of the truncation applied to the recipient's copy.
Complete Box 1 for Unemployment Compensation
Report total unemployment compensation paid during 2017 in box 1, including payments from governmental unemployment compensation programs. If you make payments from a contributory program deemed to be like unemployment compensation, file a separate Form 1099-G for each program type.
Enter the total amount before any income tax was withheld from the payment. You must report the gross payment amount rather than the net amount received by the recipient after withholding.
Complete Box 2 and Box 3 for Tax Refunds
Enter state or local income tax refunds, credits, or offsets issued in 2017 in box 2. Include amounts credited to estimated tax, offset against debts, or redirected as charitable contributions because all are taxable if the taxpayer claimed the underlying tax as an itemized deduction.
Enter the tax year for which the box 2 refunds apply in box 3 using the format YYYY. No entry is required in box 3 if the refund applies to the 2016 tax year.
Report Backup Withholding in Box 4
Enter backup withholding at the 28 percent rate on payments required to be reported in box 6 or box 7. Backup withholding applies if the recipient failed to provide a taxpayer identification number per Form W-9 rules.
Enter any voluntary federal withholding on unemployment compensation, Commodity Credit Corporation loans, or certain crop disaster payments in box 4. Recipients may request voluntary withholding from these payments to satisfy their federal income tax obligations throughout the year.
Complete Boxes 5 Through 9
- Enter reemployment trade adjustment assistance payments of $600 or more in box 5.
- Report taxable grants of $600 or more from federal, state, or local government sources in box 6.
- Enter Department of Agriculture payments or nominee payments of agricultural subsidies in box 7.
- Check box 8 only if the box 2 amount derives from an income tax exclusive to trade or business income and not a general tax.
- Report market gain on Commodity Credit Corporation loans repaid using cash or CCC certificates in box 9.
Complete State Information Boxes
Enter the two-letter state abbreviation in box 10a, the state identification number assigned by the individual state in box 10b, and the amount of any state income tax withheld in box 11. Coordinate with state reporting requirements in effect for 2017 if filing with state tax authorities.
Assemble and File Forms
Prepare Copy A for the IRS, Copy 1 for state tax departments if required, Copy 2 for recipient state returns if required, and Copy B for the recipient. File Copy A with Form 1096 to the IRS by February 28, 2018, for paper filing or April 2, 2018, if filing electronically using the FIRE or AIR system.
Recipient Filing Steps
Verify Identification Number
The 2017 form may display only the last four digits of your identification number on Copy B for privacy protection. Confirm the complete number is on record with the payer if needed for verification purposes.
Report Unemployment Compensation
Report box 1 unemployment compensation on your tax return's unemployment compensation line. If married filing jointly, each spouse must calculate the taxable amount separately using their individual payment amounts.
If you made contributions to a governmental unemployment compensation program or a governmental paid family leave program and received a payment from that program, you may deduct your contributions on Schedule A if itemizing deductions. If you do not itemize deductions, you only need to include in income the amount that exceeds your contributions to the program.
Determine State Tax Refund Taxability
Box 2 state and local tax refunds are taxable only if you deducted the underlying state or local income tax paid on Schedule A, and box 3 indicates the related tax year. No entry in box 3 means the refund applies to 2016 taxes, and you must report box 4 federal income tax withheld as tax paid on your return.
Report Other Income Types
Report box 5 reemployment trade adjustment assistance payments on Form 1040 under the other income line per Form 1040 instructions. Include box 6 taxable grants and box 7 agriculture payments on appropriate schedules, such as Schedule C, Schedule F, or Form 8825 for partnerships.
If box 8 is checked, the box 2 amount represents trade or business income that you must report on Schedule C or Schedule F rather than as a personal income tax refund. Report box 9 market gain on Commodity Credit Corporation loans per Schedule F instructions.
2017 Year-Specific Updates
Backup withholding applies at the 28 percent rate for 2017 if the recipient failed to provide a valid taxpayer identification number or Form W-9. Box 3 instructions clarify that no entry is required if the box 2 refund applies to the 2016 tax year. Copy B may display only the last four digits of the recipient's identification number for privacy protection, though the complete number must appear on Copy A filed with the IRS.
Unemployment contributions to governmentally paid family leave programs are separately reported, and recipients may deduct contributions on Schedule A if itemizing or reduce income by contributions if not itemizing. The FIRE and AIR electronic filing systems remain available for 2017 information returns, and paper filers must use scannable IRS-printed forms rather than website-downloaded versions.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
