What’s this 1099-G Form I Just Got?
If you received unemployment benefits last year, chances are you may have received something new in the mail: a 1099-G form. Hang onto it. It’s something you’re going to need for your taxes.
What is a 1099-G Form?
A 1099-G form isn’t specific to unemployment benefits, but one of its most common uses is as an unemployment tax form. The 1099-G form is intended to report any funds that you received from the government, including tax refunds. Box 1 on the form shows you the amount of money you received in unemployment benefits for the previous year.
“Generally, you must include in taxable income any unemployment compensation from a state government,” notes Intuit, the maker of TurboTax tax filing software.
Box 1 of the 1099-G Form shows your total unemployment compensation payments for the year. The amount from box 1 needs to be included in your income.
Schedule 1 for Form 1040 includes a separate line for unemployment compensation in the income section.
If you’ve chosen to have taxes withheld from your benefits, that amount will appear in Box 4, notes H&R Block.
You don’t need to attach the 1099-G to your tax return. The amount is reported to the IRS, so it already knows.
Remember that in addition to paying federal taxes on unemployment benefits, you may have to pay state taxes as well. On the other hand, even some states that normally impose taxes on unemployment benefits waived them for 2020 and, in some cases, 2021. So, check before you file your taxes.
Where to Find Your 1099-G Form
Chances are, you may have received your 1099-G form in the mail. According to a list maintained by taxoutreach.org, a project of the Center on Budget and Policy Priorities, 38 states and the District of Columbia automatically mail out 1099-G forms. Four states, such as New York, don’t mail them out at all; taxoutreach.org has descriptions of how to get those.
But what if you didn’t receive yours by mail? This chart from H&R Block tells you how to get the 1099-G form from each state.
For example, in California, you can request your 1099-G form either online or by phone.
Generally, you would have received your 1099-G by now; in fact, generally, they are mailed out by Jan. 31. One exception this year is Michigan, because the state received an extension from the Internal Revenue Service (IRS)based on delays in waiver determination. The issue is that a number of residents received unemployment benefits for which it was later determined they were not eligible, but the state requested a waiver on requiring those residents to pay back the benefits because they had applied for them in good faith. Michigan is now mailing out 1099-G forms.
What if You Received a 1099-G and You Shouldn’t Have?
Now, what if you got a 1099-G form and you didn’t receive any unemployment benefits the previous year, or the amount seems larger than you remember receiving? That could be a problem.
As you may recall, a number of states were hit by fraudulent unemployment insurance (UI) claims post-COVID-19. In some cases, fraudsters were able to obtain personally identifiable information from other people and then file for unemployment benefits in their names. If you receive a 1099-G stating that you received unemployment benefits, and you didn’t receive any, or you received less than the form says you did, be sure to report it, following the directions at the United States Department of Labor fraud website. In summary:
Report it to the unemployment office for the state that issued it
Also, report it to the U.S. Department of Justice’s National Center for Disaster Fraud.
In addition, the Department of Labor recommends that you check your credit reports regularly to ensure nobody applied for credit using your personally identifiable information.
Now what? Do you need to pay taxes on the unemployment benefits that someone else fraudulently obtained on your behalf? No.
“When you file your income taxes, ONLY include income you actually received. Do not wait to receive a corrected 1099-G to file your taxes,” the Department of Labor writes.
- “The processing of your tax return should not be delayed while your report of unemployment identity theft is under investigation.
- If you have not filed your taxes yet, do not report the incorrect 1099-G income on your tax return.
- If you have already filed your taxes, do not file an amended return. The IRS will issue additional guidance regarding your next steps. Refer to the Identity Theft and Unemployment Benefits page on IRS.gov for updates and additional tax filing information.”
Other 1099-G Unusual Cases
There may be other nuances in your 1099-G situation. Here’s a couple of them, as described by the Georgia Department of Labor (GDOL); if one of these cases also applies to you, check with your state.
“If you received a 1099-G for benefits you returned to the GDOL: In accordance with IRS rules, an individual that receives UI benefits and does not use them will still receive a 1099-G but can show the money as being paid back. If you returned any of the payments you received or repaid some or all the benefits that were determined to be an overpayment, you will be able to deduct the amount on your IRS 1040 tax form. The amount will be subtracted from the amount of unemployment compensation reported on your 1099-G. The GDOL is required by law to report payments and taxes withheld to the IRS/GA Department of Revenue, even if the money was returned or paid toward an overpayment.
“If you received a 1099-G for benefits you never received to return them or destroyed the Way2Go card: If an employer filed claim was filed on your behalf and you never received the funds to return them to the GDOL or destroyed the Way2Go card, you should submit a Request to Repay UI Benefits. After the request is submitted and processed, you will receive a document that will serve as an acknowledgment from the GDOL that you have requested to return or repay the UI benefits issued in the tax year 2021. This document can be used for tax records as proof of repayment.”
Similarly, if you receive a 1099-G with an incorrect unemployment benefits figure, or an incorrect figure on payments you paid back, contact your state unemployment insurance office.
Finally, be sure you remember to include the 1099-G information when you file your tax return. Because it was filed by the government, the IRS will have a copy and will know if you didn’t report it. “Once the IRS realizes that you owe additional tax on your unreported 1099 income, it will notify you and retroactively charge you penalties and interest beginning on the first day your tax payment is late,” warns the TurboTax website.
If you do forget, file an amended tax return on Form 1040-X, Amended U.S. Individual Tax Return, and include a copy of the 1099-G with the amended return as well as a payment for any tax you now owe, TurboTax said.
