What Is a 1099-G?

Form 1099-G is a statement to notify taxpayers of the amount of state income tax refunds, credits or offsets received for the taxable year. Filing the 1099-G tax form is required when the taxpayer claims state income tax payments as itemized deductions on their Federal Income Tax Return.

The most common use of this tax form is to report unemployment compensation along with any local or state income tax refunds marked as itemized deductions during the previous year. Those who receive unemployment payments from their state government are required to pay taxes on the total compensation amount. Filing unemployment compensation information on the 1099-G is required if the filer claimed the payments as an itemized deduction on their Federal Income Tax Return.

Filing the 1099-G form is not required if the state and local funds received were not itemized. However, a 1099-G form is still sent to taxpayers receiving state tax refunds or unemployment compensation for record-keeping purposes.

Box 1 on the form reveals the total unemployment compensation amount received for the year, while Box 2 reveals the amount of refunds, credits or offsets of local or state income tax received. Box 3 indicates the amount of deductions taken by the taxpayer, if applicable, during the previous tax year.