What Form 1099-G Reports and Why You Received It

Form 1099-G reports government payments you received during the tax year

Form 1099-G is a record of money paid to you by a government agency. The IRS requires these agencies to send you a copy and file one with the IRS so your tax return matches what the government has on record. The form shows the amount, the type of payment, and the agency that sent it.

You will receive a 1099-G if you got unemployment benefits, state tax refunds, federal tax refunds, agricultural payments, or certain other government information during the year. The form arrives by January 31 of the following year. You must report the income shown on your tax return, though some types of 1099-G income may not be taxable depending on your situation.

The most common reason people receive a 1099-G is unemployment benefits. If you collected state unemployment insurance in 2024, you will get a 1099-G in early 2025 showing the total amount you received. This is true even if you only collected for a few weeks.

Key Takeaways

• Form 1099-G reports government payments including unemployment benefits, tax refunds, and agricultural information.
• You must report 1099-G income on your tax return, though some types (like tax refunds) are not taxable.
• The form arrives by January 31 and shows what the IRS already knows about your income.
• If you received unemployment benefits, the entire amount appears on the form, but you may be able to exclude part of it from taxable income under certain rules.

The four boxes on Form 1099-G and what they mean

Form 1099-G has four main boxes that report different types of payments. Box 1a shows unemployment benefits paid to you during the year. This is the total amount before any taxes were withheld. Box 1b shows federal income tax that was withheld from your unemployment benefits if you chose to have it taken out.

Box 2 reports state income tax refunds you received. This is the money your state sent back to you after you overpaid on your state taxes. Box 3 shows local income tax refunds. Many people will have amounts in Box 1a and Box 2, but not all boxes will have numbers on every form.

Boxes 5 through 7 are for agricultural payments, commodity loans, and other specialized government programs. Most individual taxpayers will not see amounts in these boxes. If you do, the instructions that came with your form will explain what type of payment it represents.

Why unemployment benefits on a 1099-G are still taxable income

Unemployment benefits are considered taxable income by the federal government. When you receive them, you are supposed to report them on your tax return. The 1099-G documents what you received so the IRS can match it against your return.

You may have had federal income tax withheld from your unemployment checks if you requested it. That withholding appears in Box 1b of your 1099-G. Even if tax was withheld, you still must report the full amount from Box 1a as income on your return. The withholding just reduces what you owe or increases your refund.

Some unemployment benefits may be excluded from taxable income under specific rules that change by year and by situation. For example, certain amounts of unemployment were excluded in 2020 and 2021 under federal relief programs. Check the IRS website or speak with a tax professional about whether any exclusion applies to your 1099-G.

Tax refunds on Form 1099-G are usually not taxable

If Box 2 of your 1099-G shows a state tax refund, that amount is generally not taxable on your federal return. You already paid that tax in a previous year, so getting it back is not new income. The IRS reports it on the 1099-G so it can track refunds, but you do not report it as income on your federal tax return.

The only exception is if you deducted state and local taxes (SALT) on your federal return in the year you paid them. If you took the standard deduction instead, the refund is definitely not taxable. If you itemized deductions and claimed state taxes paid, you may need to report part of the refund as income in the year you receive it. This is a complex situation — a tax professional can tell you whether it applies to you.

What to do if your 1099-G amount is wrong

If the amount on your 1099-G does not match what you actually received, contact the government agency that issued it first, not the IRS. The agency that sent you the payment — your state unemployment office, for example — is responsible for correcting the form. They can issue a corrected 1099-G if there was an error.

Keep records of what you actually received: bank deposits, payment stubs, or letters from the agency. If the agency issued a corrected form, you will receive a new 1099-G marked as a correction. You then report the corrected amount on your tax return. If you filed your return before receiving the correction, you may need to file an amended return using Form 1040-X.

Do not ignore a 1099-G you believe is wrong. The IRS receives a copy of the form and will expect your return to match it. If your return shows a different amount with no explanation, the IRS may send you a notice.

Reporting your 1099-G on your tax return

Where you report your 1099-G depends on the type of income. Unemployment benefits from Box 1a go on line 1 of Form 1040 (the main federal tax form) under "Wages, salaries, tips." State and local tax refunds from Box 2 generally do not go anywhere on your federal return, as explained above.

If you use tax software, the program will ask you to enter the amounts from your 1099-G forms. It will place them in the correct locations on your return automatically. If you file by hand or with a tax professional, make sure all 1099-G forms are accounted for and that the amounts match what you report.

You must attach a copy of your 1099-G to your return if you are filing on paper. If you file electronically, you do not attach it, but keep it with your records in case the IRS asks questions later.

Frequently Asked Questions

Do I have to report unemployment benefits if I only received a small amount?

Yes. The IRS requires you to report all unemployment benefits shown on your 1099-G, regardless of the amount. The agency that paid you reported it to the IRS, so your return must match that report. Failing to report it can trigger an IRS notice.

What if I did not receive a 1099-G but I got unemployment benefits?

Contact your state unemployment office and ask them to send you a copy. They are required to issue the form by January 31. If you filed your return without it and later receive the form, you may need to file an amended return to report the income.

Can I deduct expenses against my 1099-G income?

No. Unemployment benefits and tax refunds are not business income, so you cannot deduct job search expenses or other costs against them. Report the full amount as shown on the form.

Will my 1099-G affect my tax refund or what I owe?

Yes. The amount on your 1099-G is added to your other income to calculate your total taxable income for the year. A larger 1099-G amount may reduce your refund or increase what you owe, depending on your other income and tax situation.

What is the difference between a 1099-G and a 1099-NEC?

Form 1099-NEC reports non-employee compensation (self-employment income), while 1099-G reports government payments. They are filed by different entities for different types of income. You may receive both forms in the same year if you had both types of income.