What Form 1099-G Is For
Form 1099-G (2017) reports unemployment compensation, unemployment benefits, and other government payments received during the previous calendar year. It helps taxpayers and the Internal Revenue Service track money paid by government agencies, such as unemployment insurance or state income taxes, that is refunded. This tax form ensures that benefits paid or refunded are correctly reported as taxable income when filing your federal tax return or state tax return.
When You’d Use Form 1099-G
You’ll use Form 1099-G if you received unemployment benefits, a state tax refund, or certain payments like taxable grants. The form is mailed by January 31 for the prior tax year, showing the total amount of benefits paid or refunds issued for that year. Even if you did not receive a paper copy, you must report the income on your tax return. If you notice an incorrect or different amount, contact the issuing department immediately to request an updated form before you file.
Key Rules or Details for 2017
- Reporting thresholds: Form 1099-G was required if you received at least $10 in unemployment compensation or state income tax refunds, or $600 or more in other government payments.
- Unemployment compensation: Unemployment benefits are considered taxable income and must be reported on your federal tax return. Federal income taxes withheld are shown in Box 4.
- State tax refunds: State income taxes refunded are taxable only if you itemized deductions in the previous calendar year. If you took the standard deduction, the refund is not taxable.
- Filing deadlines: Government agencies were required to mail your form by January 31 and file it with the IRS by February 28.
- Backup withholding: For certain payments, 28% was withheld if your Social Security number or taxpayer ID was missing.
- Corrections: If the benefit payments or income amounts were repaid or incorrect, request a corrected form from the paying agency before submitting your return.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Review your Form 1099-G
Check the tax form carefully for accuracy. Verify your name, address, account number, and Social Security number. Compare benefit payments and taxes withheld against your records. If the total amount appears wrong, contact the department that issued it before filing.
Step 2: Understand each box on the form
Each box provides important tax information. Box 1 shows unemployment compensation or benefits paid. Box 2 lists state income tax refunds. Box 4 reports federal income tax withheld. Always review these carefully to determine how they affect your income tax return.
Step 3: Gather all related forms
If you received unemployment benefits from more than one state or other government payments, you may have multiple 1099-G forms. Collect every form to ensure that all income and withholding amounts are correctly reported on your federal tax return.
Step 4: Report income on your return
Enter your unemployment compensation and other payments as taxable income where required on your Form 1040. Include any federal income taxes withheld as a credit to reduce the total tax you owe. Follow the IRS instructions for your filing situation to complete the process.
Step 5: Keep complete records
Keep a copy of your Form 1099-G and related records for at least three years. These documents will help you verify your tax information or support your claim if the IRS or your state revenue department sends a notice about underreported income.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Forgetting to report unemployment income: Always include unemployment compensation on your tax return to avoid a bill for unpaid taxes or penalties later.
- Reporting a refund when you took the standard deduction: Determine whether you itemized the previous year; if not, the refund should not be included as taxable income.
- Ignoring withheld taxes: Report the federal income tax withheld shown in Box 4 as a credit to reduce your final tax owed.
- Not requesting a corrected form: If the benefits paid or withheld amounts differ from your records, request an updated form before submitting your tax return.
- Discarding a form with small payments: Even a small total amount must be reported because the IRS already has a copy of the same form.
- Failing to keep records: Save your tax form, mail confirmations, and repayment notes to address any future notice or interest charges from the Internal Revenue Service.
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 you submit your income tax return, the IRS matches your Form 1099-G details with the government payments reported. If the information matches, your return processes normally. If an error or a different amount is found, you might receive a CP2000 notice for underreported income—correct issues by submitting Form 1040X to amend your return. Keeping your records organized ensures the easiest and fastest way to resolve any problem.
FAQs
Do I still need to report unemployment benefits if I didn’t receive Form 1099-G?
Yes, you must report all unemployment compensation received, even if your tax form never arrived in the mail. Visit your state labor or revenue department’s website to access and print your updated form or request a paper copy.
What if my Form 1099-G shows a different amount than I received?
If the form lists a different amount of benefits paid, contact the agency that issued it immediately. They will correct the error and mail or post an updated form. Report only the accurate total amount to avoid later penalties or interest.
How do I report government payments on my income tax return?
Government payments such as unemployment insurance, state refunds, or taxable grants should be entered on your federal tax return under the correct income section. Check each box for withheld taxes and claim them as credits where applicable.
Can I file my income tax return without the tax form?
You can file your income tax return even without a paper copy of the tax form if you know the total income from benefits received. Access your account online through your state department to print your Form 1099-G or request a replacement.
What should I do if I’m a victim of identity theft related to unemployment benefits?
If you suspect fraud or someone filed a claim using your Social Security number, report fraud immediately to your state labor department and the IRS. Keep detailed records of notices, bills, or repayments. Please submit the corrected information once your account is cleared.
How do I report and repay overpayment of unemployment benefits on Form 1099-G?
If you repaid benefits within the same tax year, the corrected amount should appear on your updated form. If repaid later, note the repayment on your next income tax return and deduct the amount to avoid paying taxes twice on the same money.
What if I get a notice from the IRS about my unemployment compensation?
A notice often means your income reported didn’t match what the IRS received from the Department of Revenue. Review your records, confirm the amounts, and file an amended return if necessary. Paying promptly prevents added penalties or interest.
