Form 1099-G: Certain Government Payments (2021) – Your Complete Guide

If you received unemployment benefits, a state income-tax refund, or other government payments in 2021, you likely got Form 1099-G. This guide explains what it reports, how it affects your 2021 federal return, and where each amount belongs.

What the form is for

Form 1099-G is how federal, state, and local agencies report certain payments they made to you. The most common items are:

• Unemployment compensation (Box 1). Shows the total benefits paid before withholding. All 2021 unemployment benefits are taxable at the federal level. Report on Schedule 1 (Form 1040), line 7.
• State or local income-tax refunds (Box 2). Potentially taxable only if you itemized in the prior year and benefited from deducting those taxes. If you took the standard deduction, it’s not taxable.
• Other government payments. These include RTAA payments, taxable grants, agricultural payments, and CCC market gain (see the box list on the form).

Agencies must furnish Copy B to you by January 31 and file with the IRS.

Late or amended situations

• Didn’t receive a 1099-G? You’re still responsible for reporting taxable income—contact the agency and use your records to file on time.
• Need to amend? If a late or corrected 1099-G changes your tax, file Form 1040-X within the normal amendment window.

✅ Important deadline correction: The filing deadline for 2021 returns (filed in 2022) was April 18, 2022 for most taxpayers—not May 17 (that date applied to 2020 returns).

Key rules for 2021

• No unemployment exclusion in 2021. The $10,200 exclusion applied to 2020 only under ARPA. For 2021, unemployment is fully taxable.
• Where to report. Enter unemployment from Box 1 on Schedule 1, line 7; federal tax withheld (Box 4) goes on Form 1040, line 25b.
• State refunds. Taxable only if you itemized the prior year and got a tax benefit from the deduction.

Step-by-step: reporting 1099-G

1. Collect all forms. If you were paid by multiple states/programs, add the Box 1 amounts together for Schedule 1, line 7.
2. Unemployment (Box 1). Report total on Schedule 1, line 7.
3. State refund (Box 2). Include only if you itemized last year and the worksheet shows it’s taxable.
4. Withholding (Box 4). Claim on Form 1040, line 25b.
5. Other boxes. Follow the form’s box descriptions for RTAA, grants, agriculture, CCC market gain, etc. (see the 2021 form).
6. Don’t attach the 1099-G. Keep it with your records; the IRS gets a copy from the payer.

Common mistakes (and easy fixes)

• Not reporting unemployment because the form is missing. You must report taxable benefits even without the form; contact the agency.
• Forgetting Box 4 withholding. Enter it on 1040 line 25b so you get credit.
• Taxing a non-taxable state refund. If you didn’t itemize last year, don’t include Box 2 in income.
• Confusing 2020’s unemployment exclusion with 2021. The exclusion was 2020-only.
• Identity-theft 1099-G. If you got a 1099-G for benefits you didn’t receive, contact the state for a corrected form and file Form 14039 with the IRS.

After you file

The IRS matches your return to the 1099-G on file. Mismatches typically trigger a CP2000 notice proposing changes; you can respond with documentation or corrections.

Quick reference (official sources)

• About Form 1099-G (boxes, who files, due dates).
• Form 1099-G (2021 PDF) – box labels.
• Schedule 1 (Form 1040) 2021 – unemployment on line 7.
• Form 1040 Instructions – where to enter Box 4 withholding (line 25b).
• ARPA unemployment exclusion applies to 2020 only.
• 2021 return filing deadline (April 18, 2022).

If you’d like, I can also reformat this into your house style (headings, pull-quotes, callouts) or add a brief Spanish blurb for LATAM readers.

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