IRS Form 1099-G, Certain Government Payments

Form 1099-G will be sent to the taxpayers who have received certain types of payments from the state, federal, and local governments. These payments are entered on the tax return of the individual and are considered to be taxable income. 

About Form 1099-G

The taxpayers receive a 1099G Form if they received unemployment compensation, refunds, and other payments from the government. These government grants are considered as income and are expected to be reported in the Income Tax return. 

The federal, state, and local government should also file Form 1099-G if they have received payments on Commodity Credit Corporation loan. They should also file the Form if they have paid out state or local income tax refunds, unemployment compensation, taxable grants, agricultural payments, etc.

What is reported on Form 1099 G?

The federal, state and local governments will file this Form if they have made payments of,

• Box 1: Unemployment compensation: The amount that is reported in this box includes, unemployment compensation, payments from the railroad retirement board for unemployment, and payments from the contributory programs that are been deemed for unemployment compensation.
• Box 2: State or local income tax refunds, credits, and offsets: The amount that is reported in this box includes, refunds of the local and state income tax from last year’s returns, carryforward credits and refunds, and overpayment of tax. Other entries are,
  1. Refund, credits, and tax offsets on net taxable income.
  2. Refunds, credits, and tax offsets on dividends and tax on capital gains, if the taxpayer has itemized the deductions.
  3. If the taxpayer has itemized the deductions on the federal return, the refund will be considered to be taxable income. 
• Box 5:RTAA Payments: Re-employment trade adjustment assistance payment of $600 or more or reported here.
• Box 6: Taxable grants: Grants of  $600 or more are reported in this box and it includes the grants for subsidized energy financing, grants for projects that conserve or produce energy. 
• Box 7: Agricultural payments: Pertains to the subsidy payment that is made to the farmers and fishers and is generally reported on Schedule F.
• Box 8: Trade or business income: The amount in this Box relates to a trade or a business exclusively.
• Box 9: Margin Gain: The amount entered in the box corresponds to the market gain that is associated with CCC loans and their repayment.
• Box 10: Box 10a shows the abbreviated name of the state and box 10b gives the state identification number. 

Due dates for filing Form 1099- G

Those who have received unemployment compensation, state and local income tax refunds, and credits will receive a copy of Form 1099-G from the filing agency by January 31st of the tax year. There are five copies of Form 1099-G. The IRS receives Copy A, that state tax department will get Copy 1, the taxpayer will get Copy B. Copy 2 should be filed with the state income tax return by the taxpayer, and copy C goes to the filing agency.

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