Form 1099-G: Certain Government Payments (2018)

What this form reports

Form 1099-G is an information return a federal, state, or local agency sends you (and the IRS) to show certain payments you received in 2018. The most common are:

• Unemployment compensation (Box 1) — fully taxable at the federal level.
• State or local income tax refunds, credits, or offsets (Box 2) — taxable only if you itemized state/local tax (SALT) on your prior 2017 federal return and got a tax benefit from it.
• RTAA payments (Box 5) — if $600+.
• Taxable grants (Box 6) — if $600+.
• Agricultural payments (Box 7).

Also look for Box 4 (federal income tax withheld) and state boxes (Boxes 10–12).

Tip: The IRS already has the form. Your return should match it (or clearly explain any differences).

When you’ll get it (and what to do if it’s late or wrong)

• Furnished to you by: Jan 31, 2019 (for 2018 payments).
• Didn’t arrive? Contact the issuing agency or grab it from your state’s portal and still report the income using your records.
• Got a CORRECTED form after filing? File Form 1040-X to amend if the change affects your tax.

2018 rules & thresholds (quick reference)

• Must issue 1099-G if:
  • $10+ of unemployment or state/local tax refunds, or
  • $600+ of RTAA, taxable grants, or ag payments.
• Unemployment (Box 1): Always federally taxable. You could have elected 10% federal withholding; if so, it appears in Box 4 and counts as prepaid tax.
• State/local tax refund (Box 2): Taxable only if you itemized SALT on your 2017 federal return and got a tax benefit. If you took the standard deduction in 2017, the 2018 refund is not taxable.
• Federal vs. state: Some states don’t tax unemployment even though the IRS does—check your state’s rules.
• Backup withholding: May appear in Box 4 if your TIN was missing/incorrect or flagged.

How to report it (2018 Form 1040 layout)

Most 1099-G items flow through Schedule 1 (Additional Income) and then to Form 1040:

1. Unemployment compensation (Box 1) → Schedule 1 (Additional Income); then to Form 1040 as part of total income.
2. State/local tax refund (Box 2) → Use the State and Local Income Tax Refund Worksheet (in the 2018 Schedule 1 instructions) to see what, if any, amount is taxable, then report that taxable amount on Schedule 1.
3. RTAA / taxable grants / agricultural payments → Report per 2018 instructions (generally on Schedule 1 as other income).
4. Federal income tax withheld (Box 4) → Enter with federal withholding on Form 1040 (in the payments/withholding section). This increases your total payments.

Keep the form with your records for at least 3 years. If Box 2 (refund) ties to an earlier tax year, save until you’re sure no amendment questions remain.

Step-by-step checklist

1. Collect all 1099-G forms (unemployment office, state DOR, USDA, etc.).
2. Confirm details: Name/SSN, amounts in Boxes 1–2, withholding in Box 4, and any state info.
3. Decide taxability:
   • Box 1: fully taxable.
   • Box 2: use the worksheet (taxable only if you itemized in 2017 and benefited from SALT).
4. Report on the right lines (Schedule 1; then to Form 1040).
5. Claim withholding (Box 4) with your other federal withholding so you don’t overpay.
6. File & keep records (form, benefit statements, worksheets).

Common mistakes (and quick fixes)

• Omitting unemployment: It’s taxable—enter the full Box 1 amount.
• Taxing a non-taxable state refund: If you didn’t itemize in 2017, the 2018 refund is usually not taxable—don’t include it.
• Forgetting Box 4: Claim federal withholding shown there; it’s your money.
• Wrong year logic: Box 2 is income in 2018 (the year you received it). Box 3 simply indicates the tax year the refund relates to and is used in the worksheet.
• Identity-theft 1099-G: If you never collected the unemployment shown, contact the state, report fraud, and get a corrected 1099-G (showing $0). Don’t report fraudulent income.

After you file

• IRS matching: The IRS matches agency 1099-Gs to your return. If amounts don’t match, expect a CP2000 notice proposing changes.
• States: Many states also match—make sure federal/state returns are consistent.
• If you catch an error later: File Form 1040-X promptly to minimize interest.

FAQs (2018)

1) I didn’t get my 1099-G. Do I still report the income?
Yes. Report using your benefit statements/bank records and request a duplicate from the agency.

2) My 2018 state refund is on 1099-G, but I used the standard deduction in 2017. Taxable?
Generally no. It’s taxable only if you itemized in 2017 and got a SALT benefit.

3) Where do I put federal tax withheld (Box 4)?
Include it with your federal withholding on Form 1040 (payments section). It reduces what you owe/increases your refund.

4) I received a CORRECTED 1099-G after filing.
Amend with Form 1040-X if the change affects tax.

5) Can I withhold tax from unemployment?
Yes—submit Form W-4V to your state to withhold 10% federal tax (and, if available, state tax) from benefits.

6) I got a 1099-G for unemployment I never received.
Report it to the state as identity theft and request a corrected form. Keep the documentation; don’t report fraudulent income.

7) Do states tax unemployment?
It depends—federal law taxes it, state rules vary. Check your state’s instructions.

Bottom line

• Unemployment (Box 1) → always federally taxable.
• State refund (Box 2) → taxable only if you itemized in 2017 and benefited from SALT.
• Match the 1099-G on your return, claim any withholding shown, and keep the worksheet you used for Box 2.

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