Form 1099-G (Rev. January 2022) — (2022) Tax Year Checklist
Purpose and Overview
Form 1099-G reports government payments that federal, state, or local government units made during calendar year 2022, including unemployment compensation, state and local income tax refunds, Reemployment Trade Adjustment Assistance payments, taxable grants, agriculture payments, and market gains from Commodity Credit Corporation loan repayments. For the 2022 tax year, the Internal Revenue Service reinforced identity theft safeguards in recipient instructions, particularly concerning fraudulent unemployment claims that became widespread during the reporting period.
The interaction between Box 2 state tax refunds and the Tax Cuts and Jobs Act limitation on state and local income tax deductions became increasingly important for taxpayers who itemized deductions. Government units must verify payment accuracy and recipient information before issuing forms.
Taxpayer Identification Requirements
You must complete both the payer's taxpayer identification number and the recipient's taxpayer identification number on all forms filed with the Internal Revenue Service. The 2022 instructions permit you to truncate the recipient's identification number on Copy B furnished to the recipient, displaying only the last four digits for identity theft protection. Still, you must retain and report the full number to the Internal Revenue Service on Copy A.
Unemployment Compensation Reporting
Enter the total unemployment compensation paid in calendar year 2022 in Box 1 if the amount equals or exceeds ten dollars, including Railroad Retirement Board unemployment payments before any federal income tax withholding. If the recipient made contributions to a governmental unemployment compensation program or a governmental paid family leave program and received a repayment, you must issue a separate Form 1099-G for that repayment amount.
This separation allows recipients who itemize deductions to properly deduct their contributions on Schedule A as taxes paid while correctly reporting only the excess as taxable income. You must also file Form 1099-G for each person from whom you withheld any federal income tax under backup withholding rules.
Federal Withholding and Backup Withholding
Report federal income tax withholding in Box 4, which includes both voluntary withholding and backup withholding amounts when the recipient requests withholding on eligible payments. Apply backup withholding at twenty-four percent on payments in Box 5, Box 6, or Box 7 if the recipient fails to provide a taxpayer identification number.
Recipients may credit amounts withheld as tax paid on their 2022 Form 1040, while state income tax withholding should be reported in Box 11. Voluntary withholding on Reemployment Trade Adjustment Assistance payments is not permitted under current regulations, unlike other government payments reported on this form.
State and Local Income Tax Refunds
Enter refunds, credits, or offsets of state or local income tax of ten dollars or more in Box 2, including carry-forward credits from refundable state tax credits, but exclude state grants, incentives, subsidies, or individual assistance programs that belong in Box 6. Interest payments of six hundred dollars or more on refunds must be reported on Form 1099-INT rather than Form 1099-G to ensure proper tax reporting.
Box 3 Tax Year Identification
Complete Box 3 to identify the tax year to which the refund applies only if the refund relates to a tax year other than the current year, as no entry is required when the refund applies to the current tax year. A state tax refund is generally taxable only if the recipient itemized deductions in the prior year and the state tax deduction actually reduced federal tax liability.
Due to the ten-thousand-dollar limitation on state and local tax deductions, refunds may not be fully taxable if the taxpayer has already reached the cap when claiming the original deduction. You are not required to furnish a copy of Form 1099-G to the recipient if you can determine that the recipient did not claim itemized deductions, but you must still file Form 1099-G with the IRS in all cases.
Trade or Business Income Designation
Check Box 8 if the amount in Box 2 represents a refund, credit, or offset attributable to an income tax that applies exclusively to income from a trade or business and is not a tax of general application. Recipients must report amounts designated as trade or business income on Schedule C or Schedule F rather than as miscellaneous income, ensuring proper classification of the refund.
Taxes on dividends, capital gains, or unincorporated business net income qualify as income taxes rather than taxes on gross receipts, making any refunds of these taxes reportable on Form 1099-G. You must furnish a Form 1099-G to the recipient in all cases when Box 8 is checked.
Reemployment Trade Adjustment Assistance and Grants
Report Reemployment Trade Adjustment Assistance payments of six hundred dollars or more in Box 5, as recipients report these amounts on the "Other income" line of Schedule 1 attached to Form 1040. Taxable grants of six hundred dollars or more belong in Box 6, which includes amounts from federal, state, or local programs that provide subsidized energy financing or grants for energy conservation or production projects, excluding scholarship or fellowship grants that require different reporting treatment.
Agriculture Payments and Market Gain
Enter Department of Agriculture payments in Box 7, including market facilitation program payments. If you received subsidy payments as a nominee for another person, file Form 1099-G to report the actual owner and enter the payment amount in Box 7.
Report market gain associated with Commodity Credit Corporation loan repayment in Box 9, whether the recipient repaid the loan using cash or CCC certificates. Recipients report market gain on Schedule F, while agriculture payments are reported on Schedule F for individuals or Form 8825 for partnerships.
State Information and Withholding
Enter the state abbreviation in Box 10a and the filer's state identification number in Box 10b if state reporting requirements apply to your filing situation. Enter any state income tax withheld in Box 11 to accommodate the Combined Federal/State Filing Program and state tax department requirements.
These boxes are provided for your convenience and need not be completed for IRS purposes, but they allow you to report payments for up to two states. If a state tax department requires that you send them a paper copy of this form, use Copy 1 to provide information to the state tax department and give Copy 2 to the recipient for use in filing the recipient's state income tax return.
Filing Requirements and Identity Theft Protection
Order official scannable Copy A forms from the IRS or use the Filing Information Returns Electronically system for electronic submission, as the 2022 instructions explicitly prohibit downloading and printing Copy A from IRS online sources because these printed versions are not scannable. Filing non-scannable forms with the IRS may result in penalties, so proper form procurement remains essential for compliance.
States have experienced significant increases in fraudulent unemployment claims involving identity theft, and recipients who suspect identity theft related to Box 1 unemployment amounts should not report incorrect amounts on their tax returns. Verify the accuracy of all unemployment compensation amounts before issuing forms to prevent reporting fraudulent claims to the IRS.
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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.
