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What is Form 1099-G?
Form 1099-G, "Certain Government Payments," is an information return that reports various payments made by federal, state, or local governments. The most common payments reported on this form are unemployment compensation and state tax refunds, but it also covers other government payments like agricultural subsidies and taxable grants.
Who Receives Form 1099-G?
You'll receive a Form 1099-G if you:
• Received unemployment compensation (including pandemic-related benefits)
• Got a state or local tax refund, credit, or offset of $10 or more
• Received agricultural payments from government programs
• Benefited from qualified state tuition program payments
• Received taxable grants from government agencies
Key Deadlines and Thresholds
Government agencies must send Form 1099-G to recipients by January 31 of the year following the payment. For example, for payments made in 2023, the form must be sent by January 31, 2024.
Important thresholds:
• State tax refunds: $10 or more
• Unemployment compensation: All amounts must be reported
• Agricultural payments: $600 or more
• Reemployment Trade Adjustment Assistance (RTAA) payments: All amounts
Information Reported on Form 1099-G
The form includes several key boxes:
• Box 1: Unemployment compensation
• Box 2: State or local tax refunds, credits, or offsets
• Box 3: Box 2 amount is for tax year
• Box 4: Federal income tax withheld
• Box 5: RTAA payments
• Box 6: Taxable grants
• Box 7: Agriculture payments
• Box 8: Market gain
• Box 9: State identification number
• Box 10: State income tax withheld
How to Handle Form 1099-G When Filing
Step 1: Verify the Information
Compare the form against your records to ensure the amounts are correct. For unemployment benefits, check your online account or payment statements.
Step 2: Determine Taxability
• Unemployment compensation is generally fully taxable
• State tax refunds are only taxable if you itemized deductions in the previous year and received a tax benefit
• Agricultural payments and taxable grants are typically fully taxable
Step 3: Report on Your Tax Return
• Report unemployment compensation on Form 1040, Schedule 1, Line 7
• Report state tax refunds on Schedule 1, Line 1 (if taxable)
• Report agricultural payments on Schedule F or Form 1040, Schedule 1
• Include any federal or state tax withholding in the appropriate sections of Form 1040
Common Mistakes to Avoid
1. Ignoring the form because you think the income isn't taxable
2. Double-reporting state tax refunds (only report if you itemized the previous year)
3. Failing to report unemployment compensation, including special pandemic payments
4. Not checking for accuracy, especially with multiple forms or payments
5. Forgetting to include state tax withholding on your return
Consequences of Incorrect Filing
Failing to report Form 1099-G income accurately can result in:
• IRS notices and correspondence
• Assessment of additional tax owed
• Interest charges on unpaid tax
• Possible penalties for underreporting income
• Delays in processing future tax returns
• Potential audits or examinations
In severe cases of intentional misreporting, criminal penalties may apply.
Special Considerations
Incorrect Forms
If you receive an incorrect Form 1099-G, contact the issuing agency immediately to request a corrected form. Keep records of your correspondence and any supporting documentation.
Identity Theft
If you receive a Form 1099-G for unemployment benefits you didn't apply for or receive, you may be a victim of identity theft. Contact your state unemployment office immediately and file a report with the IRS.
Multiple Forms
You may receive multiple Forms 1099-G if you:
• Received unemployment from different states
• Got both unemployment and state tax refunds
• Received various government payments
Each form must be reported separately on your tax return.
Following these guidelines and reporting Form 1099-G income correctly helps ensure compliance with tax laws and avoids unnecessary complications with the IRS.
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Frequently Asked Questions
Does a state tax refund always need to be reported as taxable income on a federal return?
No — a state tax refund is only taxable if you itemized deductions in the prior year and received a tax benefit from deducting state taxes. If you took the standard deduction that year, the refund is generally not taxable and does not need to be reported as income. When it is taxable, report it on Schedule 1, Line 1 of Form 1040.
What is the deadline for receiving Form 1099-G, and what thresholds trigger the form?
Government agencies are required to send Form 1099-G by January 31 of the year following payment — for example, payments made in 2023 must result in a form mailed by January 31, 2024. State tax refunds of $10 or more trigger the form, while agricultural payments require a minimum of $600. All amounts of unemployment compensation and Reemployment Trade Adjustment Assistance (RTAA) payments must be reported regardless of amount.
What should be done if a Form 1099-G arrives reporting unemployment benefits that were never received?
Receiving a Form 1099-G for unemployment benefits you never applied for or collected is a potential sign of identity theft. You should contact your state unemployment office immediately and file a report with the IRS. Keep records of all correspondence and supporting documentation throughout the process.
Are unemployment benefits — including pandemic-related payments — considered taxable income?
Yes, unemployment compensation is generally fully taxable at the federal level, and this includes special pandemic-related unemployment benefits. All amounts must be reported, with no minimum threshold exemption. Unemployment compensation is reported on Form 1040, Schedule 1, Line 7.
What are the consequences of failing to accurately report income shown on Form 1099-G?
Inaccurate or missing Form 1099-G reporting can result in IRS notices, assessment of additional taxes owed, interest charges, and potential penalties for underreporting income. Unreported income may also trigger an audit or examination and can delay the processing of future tax returns. In cases of intentional misreporting, criminal penalties may apply.
About the Author
Tax Writer
Markos Banos is a tax professional at IRS.com with expertise in U.S. federal and state tax law. Their articles are written to help taxpayers understand complex tax topics in plain English.