How to Fill Out IRS Form 1099-G (w/Examples) + FAQs

IRS Form 1099-G reports certain payments from federal, state, or local governments to taxpayers, and you must include most of these amounts on your federal tax return. The form tells the IRS about unemployment, refunds, grants, and farm payments you received during the year. Government agencies send Copy B to you and Copy A to the IRS by January 31 of the year after payment.

If you ignore a 1099-G, the IRS computer matching system will catch the gap and send you a CP2000 notice with proposed extra tax, interest, and penalties. About 23 million Americans received a Form 1099-G for unemployment compensation during 2020, and the Department of Labor estimates over $191 billion was lost to pandemic unemployment fraud, much of it tied to fake 1099-G filings.

Here is what you will learn:

• 📋 How to read every box on the official 2025 Form 1099-G and what each amount means.
• 🧾 Where each box flows on your Form 1040, Schedule 1, Schedule F, or Schedule C.
• ⚖️ Which payments are taxable, which are not, and why the tax benefit rule under IRC §111 matters.
• 🛡️ How to fight a fraudulent 1099-G if a thief filed for unemployment in your name.
• 💸 The exact federal penalties payers and recipients face for filing or reporting errors.

What Form 1099-G Is and Who Issues It

Form 1099-G, Certain Government Payments, is the information return that any unit of government uses to tell you and the IRS about money it paid you during the year. The IRS Instructions for Form 1099-G require federal, state, local, and tribal agencies to file the form when payments meet the dollar thresholds set in the Internal Revenue Code. The most common issuers are state unemployment offices, state departments of revenue, the U.S. Department of Agriculture, and disaster grant programs.

The legal hook for unemployment compensation reporting is Internal Revenue Code §6050B, which forces every state agency that pays unemployment to file an information return. State income tax refund reporting comes from Treasury Regulation §1.6050E-1, which applies when refunds total $10 or more. Agricultural and disaster payments fall under IRC §6041, the general information-return rule.

A plain-English way to think of the form is this: the government is telling on itself. Each agency is admitting it sent you money so the IRS can confirm you reported the right amount. The consequence of an agency failing to file is a penalty under IRC §6721 of up to $310 per form for tax year 2025.

A common misconception is that only unemployment goes on a 1099-G. In truth, the form covers seven separate payment types, and a single taxpayer can receive several 1099-Gs in one year for different reasons.

Who Receives a 1099-G

Anyone who received unemployment, a state or local income tax refund of $10 or more, a Reemployment Trade Adjustment Assistance (RTAA) payment, an agricultural subsidy, a taxable grant, or certain Commodity Credit Corporation (CCC) loans receives the form. Farmers who took a CCC loan and elected to treat it as income under IRC §77 also get a 1099-G. Lottery and gambling winners do not — those amounts use Form W-2G instead.

The agency must mail or electronically deliver Copy B to the recipient by January 31 and file Copy A with the IRS by February 28 on paper or March 31 electronically, per the General Instructions for Certain Information Returns. If you moved, the form may go to your old address, so always update your address with the paying agency. Failing to receive the form does not excuse the duty to report the income on your federal return.

Who Files a 1099-G

Any federal executive agency, state government, U.S. territory, or political subdivision that makes a reportable payment must file. The IRS treats Indian tribal governments the same as states for this purpose under IRC §7871. Private payers never use Form 1099-G — they use 1099-MISC, 1099-NEC, or another form.

The agency files electronically through the IRS Information Returns Intake System (IRIS) or the older FIRE system. Beginning in tax year 2023, any filer with 10 or more total information returns must file electronically under Treasury Regulation §301.6011-2. Paper filing for high-volume issuers triggers a separate penalty.

Box-by-Box Walkthrough of Form 1099-G

The 2025 version of Form 1099-G has eleven numbered boxes plus payer and recipient identification fields. Each box reports a different type of payment, and each flows to a different line on your return. Read every box even if you think you know what to expect, because agencies sometimes mix payment types on a single form.

Payer and Recipient Information

The top-left block lists the payer’s name, address, telephone number, and federal employer identification number (EIN). The recipient block lists your name, address, and taxpayer identification number (usually your Social Security number). Always check that the SSN matches yours, because a wrong SSN is the first sign of identity theft.

The account number field is optional but helps when an agency files multiple 1099-Gs for one person. The IRS requires a unique account number when the filer has multiple accounts for a recipient. If your form has a wrong name or SSN, ask the agency for a corrected form marked “CORRECTED” at the top.

The consequence of ignoring a wrong SSN is months of IRS letters. The example to picture is Maria, a Florida nurse, who got a 1099-G with the right name but a typo in her SSN; she contacted the Florida Department of Economic Opportunity and received a corrected form within three weeks.

Box 1 — Unemployment Compensation

Box 1 reports the gross amount of unemployment paid to you during the calendar year, including any federal extensions and supplemental benefits. Under IRC §85, unemployment compensation is fully taxable on your federal return. The amount belongs on Schedule 1, Line 7 of Form 1040.

The consequence of leaving Box 1 off your return is automatic. The IRS computer matches every 1099-G to your Form 1040, and a missing match generates a CP2000 underreporter notice with extra tax, interest, and a 20% accuracy-related penalty under IRC §6662.

A common misconception is that the American Rescue Plan Act’s $10,200 unemployment exclusion still applies. That break only covered tax year 2020 and expired. For 2025, every dollar in Box 1 is taxable.

Box 2 — State or Local Income Tax Refunds, Credits, or Offsets

Box 2 shows refunds, credits, or offsets of state or local income tax of $10 or more. Whether this amount is taxable depends on the tax benefit rule under IRC §111. If you took the standard deduction last year, the refund is not taxable; if you itemized and deducted state income tax, part or all of the refund may be taxable.

The IRS State and Local Income Tax Refund Worksheet in the Form 1040 instructions walks you through the math. Taxable refunds go on Schedule 1, Line 1. The SALT cap of $10,000 under IRC §164(b)(6) often makes refunds partly nontaxable, even for itemizers.

The example is David, a New York attorney who itemized in 2024 and deducted $10,000 of state tax under the SALT cap. He got a $1,500 New York refund reported in Box 2. Because his SALT deduction was already capped, the Maines v. Commissioner ruling and IRS guidance let him exclude part of the refund.

Box 3 — Box 2 Amount Is for Tax Year

Box 3 shows the tax year of the refund reported in Box 2. The number matters because the tax benefit rule depends on whether you itemized in that earlier year. A refund for 2023 tax received in 2025 still gets reported on your 2025 federal return.

If Box 3 is blank but Box 2 has a number, ask the state agency to issue a corrected form. The consequence of guessing the wrong year is mismatched IRS records.

Box 4 — Federal Income Tax Withheld

Box 4 reports any federal income tax withheld from your unemployment, RTAA, or taxable grant. Recipients can elect voluntary 10% withholding on unemployment under IRC §3402(p)(2) by filing Form W-4V with the state agency. The withholding goes on Form 1040, Line 25b.

The consequence of skipping Box 4 on your return is a smaller refund or an unexpected balance due, plus possible underpayment penalties under IRC §6654. The example: Lisa, a Michigan teacher, elected 10% withholding on her $20,000 unemployment, so Box 4 showed $2,000. She added $2,000 to Line 25b and avoided estimated tax penalties.

Box 5 — RTAA Payments

Box 5 reports Reemployment Trade Adjustment Assistance, a wage subsidy for older workers displaced by foreign trade. RTAA payments are taxable and report on Schedule 1, Line 8z as “other income.” The program is run jointly by the Department of Labor and the states under the Trade Act of 1974.

A common misconception is that RTAA is the same as Trade Adjustment Assistance (TAA) training stipends; only RTAA wage subsidies are reported on a 1099-G. The consequence of confusing them is misreporting the wrong amount.

Box 6 — Taxable Grants

Box 6 reports federal, state, or local grants you received that are taxable under IRC §61 as accessions to wealth. Examples include energy grants, SBA Shuttered Venue Operators Grants, and certain disaster business grants. The amount goes on Schedule 1, Line 8z if personal, or Schedule C if connected to a business.

A common misconception is that all government grants are taxable. Under the General Welfare Exclusion, need-based assistance such as LIHEAP energy aid and many disaster relief payments are not taxable and should not appear in Box 6. The consequence of reporting a nontaxable grant as income is overpaying tax.

Box 7 — Agriculture Payments

Box 7 reports USDA payments such as direct subsidies, conservation payments, and disaster aid. Farmers report these on Schedule F, Line 4b. Some Conservation Reserve Program payments qualify for a self-employment tax exclusion under IRC §1402(a)(1) if the recipient is on Social Security retirement or disability.

The example is Frank, an Iowa farmer who received $30,000 of CRP payments. Because Frank collects Social Security retirement, he excluded the $30,000 from self-employment tax under IRC §1402(a)(1), citing the Morehouse v. Commissioner reversal by the Eighth Circuit.

Box 8 — Trade or Business Income (Checkbox)

Box 8 is a checkbox the agency marks if Box 2 (state tax refund) or Box 6 (taxable grant) relates to a trade or business. When checked, the income goes on Schedule C, Schedule E, or Schedule F instead of Schedule 1. The consequence of ignoring the check mark is reporting business income as personal income, which understates self-employment tax.

Box 9 — Market Gain

Box 9 reports market gain on the repayment of a Commodity Credit Corporation loan when the farmer repaid the loan at a posted county price below the loan amount. The amount is taxable and goes on Schedule F, Line 4b. Farmers who elected to treat CCC loans as income under IRC §77 handle the gain differently and should consult IRS Publication 225, Farmer’s Tax Guide.

Boxes 10a, 10b, and 11 — State Information

Boxes 10a and 10b list the state and the state’s identification number. Box 11 reports state income tax withheld. These amounts flow to your state return, not your federal return, but you still need them for state tax compliance. The consequence of skipping state withholding is a balance due to the state, plus state-level penalties.

Three Most Common 1099-G Scenarios

The following table covers the three scenarios that drive most 1099-G questions. Each row pairs the situation with the federal-tax consequence. Use these as a quick reference before you read the deep examples that follow.

Situation	Federal Tax Consequence
Received $18,000 unemployment, no withholding elected	Full $18,000 taxable on Schedule 1, Line 7; possible underpayment penalty under IRC §6654
Got $1,200 state refund after taking the standard deduction last year	Refund is not taxable under the tax benefit rule of IRC §111; do not enter on Schedule 1
Identity thief filed fraudulent unemployment claim in your name	Do not report; file Form 14039 Identity Theft Affidavit and request a corrected 1099-G

Real Examples for Each Common Box

Names below are fictional, but the numbers and rules match real federal law. Each example shows the box, the entry, and the placement on the return. Compare your situation to the closest example before you file.

Example 1 — Unemployment With Withholding

Carlos, a Nevada hospitality worker, was laid off and collected $24,000 in state unemployment plus $2,400 in federal pandemic-era extensions for tax year 2025. He elected 10% withholding using Form W-4V. His 1099-G shows Box 1 = $26,400 and Box 4 = $2,640.

Carlos enters $26,400 on Schedule 1, Line 7, and $2,640 on Form 1040, Line 25b. Because his only other income was a $5,000 part-time job, his taxable income falls into the 12% bracket and he gets a small refund. The lesson is that voluntary withholding spreads the tax burden across the year and avoids penalty surprises.

Example 2 — State Refund After Itemizing

Priya, a California software engineer, itemized in 2024 and deducted the full $10,000 SALT cap. She received a $2,200 California state tax refund in 2025, reported in Box 2 with Box 3 = 2024. Using the State and Local Income Tax Refund Worksheet, Priya finds that because the SALT cap limited her deduction, only $400 of the refund is taxable.

She reports $400 on Schedule 1, Line 1, and excludes $1,800. The IRS published Revenue Ruling 2019-11 explaining this exact calculation for SALT-capped taxpayers.

Example 3 — Farmer With CCC Market Gain

Wanda, a Kansas wheat farmer, took a $50,000 CCC loan and repaid it at a posted county price of $45,000, generating a $5,000 market gain. Her 1099-G shows Box 9 = $5,000. Because Wanda did not elect IRC §77 treatment, she reports $50,000 of grain sales and the $5,000 market gain on Schedule F, Line 4b, per IRS Publication 225.

The market gain is also subject to self-employment tax because Wanda is an active farmer. The consequence of mishandling Box 9 is double-counting income or missing the SE tax due.

Mistakes to Avoid When Handling Form 1099-G

Errors on a 1099-G create audits, penalties, and refund delays. The following list collects the seven most common mistakes recipients and payers make. Each item names the mistake and the negative outcome.

• Ignoring the form because you “did not get one” — the IRS still has Copy A, and a CP2000 notice will arrive.
• Reporting a state refund when you took the standard deduction last year — you overpay tax by including a nontaxable amount.
• Forgetting to report Box 4 federal withholding on Line 25b — you lose credit for tax already paid.
• Treating a fraudulent unemployment 1099-G as your own — you pay tax on income a thief stole.
• Mixing Box 6 taxable grants into Schedule 1 when Box 8 is checked — business grants belong on Schedule C, not personal “other income.”
• Failing to attach Schedule F for Box 7 farm payments — the IRS reclassifies the income and may add self-employment tax.
• Missing the January 31 furnishing deadline as a payer — penalties under IRC §6722 reach $310 per form.

Do’s and Don’ts for Recipients

The rules below help recipients handle every 1099-G correctly. Each entry includes the reason behind the rule.

• Do compare every box to your bank records, because agencies sometimes report payments you never received.
• Do keep the form for at least three years, because the IRS statute of limitations under IRC §6501 runs three years from filing.
• Do request a corrected 1099-G in writing, because phone requests rarely create a paper trail.
• Do file Form 14039 if you suspect identity theft, because the IRS will not remove fraudulent income without it.
• Do use the State and Local Income Tax Refund Worksheet, because guessing the taxable share of a state refund causes audit issues.
• Don’t throw away a 1099-G that looks wrong — the IRS still has a copy and silence does not fix the record.
• Don’t assume disaster grants are taxable, because the General Welfare Exclusion may apply.
• Don’t forget state withholding in Box 11, because skipping it means a balance due to the state.
• Don’t combine multiple 1099-Gs on one Schedule 1 line without records, because audit reconciliation becomes painful.
• Don’t sign a return that omits any 1099-G income, because doing so can support a fraud penalty under IRC §6663.

Pros and Cons of the Form 1099-G System

The form helps both the government and the taxpayer, but it also brings burdens. The following lists weigh both sides with reasons.

• Pro — Creates a clear paper trail, because both the agency and the recipient know what was paid.
• Pro — Triggers federal withholding options, because Box 4 lets recipients prepay tax and avoid penalties.
• Pro — Standardizes reporting across all 50 states, because every agency uses the same boxes.
• Pro — Helps catch unemployment fraud, because mismatches surface on the IRS computer.
• Pro — Supports tax benefit rule analysis, because Box 3 anchors the refund to a specific prior year.
• Con — Lists fraudulent unemployment claims as your income, because the agency cannot verify identity at filing time.
• Con — Confuses recipients about taxability, because not every Box 6 grant is actually taxable.
• Con — Creates duplicate paperwork for farmers, because Schedule F, Form 1099-G, and Form 4797 may all apply to the same payment.
• Con — Imposes hard penalties on small agencies, because the IRC §6721 penalty applies even to honest mistakes.
• Con — Delays refunds when boxes do not match the federal return, because IRS matching can hold the entire return.

Key Entities Behind Form 1099-G

Several agencies and concepts shape the form. The Internal Revenue Service writes the instructions, processes Copy A, and runs the matching program. State workforce agencies, such as the Texas Workforce Commission and the California Employment Development Department, pay unemployment and issue Box 1 amounts. State revenue departments, such as the New York Department of Taxation and Finance, pay income tax refunds and report Box 2.

The Commodity Credit Corporation and the Farm Service Agency handle agricultural payments and CCC loans, populating Boxes 7 and 9. The U.S. Department of Labor oversees the RTAA program reported in Box 5. The Treasury Inspector General for Tax Administration audits IRS handling of fraudulent 1099-Gs.

The legal authority for the form runs through several Code sections. IRC §85 makes unemployment taxable. IRC §111 governs the tax benefit rule. IRC §6041, IRC §6050B, and IRC §6050E impose the filing duty itself.

Step-by-Step Process for Payers Filing Form 1099-G

The IRS expects payers to follow a consistent workflow each January. Missing one step triggers either a penalty or a corrected return. Use the steps below as a checklist.

Step 1 — Identify Reportable Payments

The agency pulls a year-end report of all payments made to recipients. It then matches each payment to one of the seven 1099-G categories. Payments below the $10 threshold for refunds and $600 for grants do not require a form.

The consequence of missing a reportable payment is an IRC §6721 penalty of $60–$310 per form, depending on how late the form is. Intentional failure raises the penalty to $660 per form with no cap.

Step 2 — Collect Recipient TINs

The agency uses Form W-9 to gather taxpayer identification numbers from recipients. A missing or wrong TIN forces the agency to apply 24% backup withholding under IRC §3406. The recipient sees that backup withholding in Box 4.

Step 3 — Generate Forms

The agency uses approved software to populate every box. The form must use the official scannable red-ink Copy A when paper-filed, or it must transmit electronically through IRIS or FIRE. Filers with 10 or more total information returns must e-file under Treasury Regulation §301.6011-2.

Step 4 — Furnish Copy B to Recipients

Copy B must reach the recipient by January 31. The agency may use mail, hand delivery, or — with consent — electronic delivery under Treasury Regulation §31.6051-1(j). Late furnishing triggers an IRC §6722 penalty.

Step 5 — File Copy A with the IRS

The deadline is February 28 on paper or March 31 electronically. The agency files through IRIS, the FIRE system, or by mail with Form 1096 as the cover. Copy 1 also goes to the state tax department where applicable.

Step 6 — Issue Corrections

If a box is wrong, the agency files a corrected return marked “CORRECTED” at the top. The General Instructions for Certain Information Returns describe two-step corrections for wrong-payee or wrong-TIN errors. Failure to correct timely keeps the original penalty in place.

Step-by-Step Process for Recipients Reporting Form 1099-G

Recipients have their own workflow each filing season. The steps below match the order most tax software uses. Walk through each in sequence.

Step 1 — Verify Personal Information

Confirm the name, SSN, and address on the form. A mismatch with your Social Security card signals either a clerical error or identity theft. Contact the issuing agency in writing to request a corrected form.

Step 2 — Match Each Box to the Right Schedule

Use the Box 1–11 walkthrough above to map every dollar. Unemployment goes on Schedule 1, Line 7. Taxable refunds go on Schedule 1, Line 1. Farm payments go on Schedule F. The consequence of a wrong placement is misclassified income and possible self-employment tax errors.

Step 3 — Apply the Tax Benefit Rule

For Box 2 refunds, run the State and Local Income Tax Refund Worksheet. Skip this only if you took the standard deduction last year. The tax benefit rule under IRC §111 keeps you from paying tax on a refund that gave you no benefit.

Step 4 — Claim Federal Withholding

Move Box 4 to Form 1040, Line 25b. The IRS treats this withholding as already paid, so it reduces your balance due dollar-for-dollar.

Step 5 — Keep Records

Store the form and supporting documents for at least three years. If you under-reported by more than 25%, the IRC §6501(e) statute extends to six years. Identity theft cases require keeping records indefinitely.

Court Rulings and Federal Guidance That Shape Form 1099-G

Several rulings shape how taxpayers handle a 1099-G. Maines v. Commissioner, 144 T.C. 123 (2015), held that refundable state tax credits exceeding state tax liability are not taxable under IRC §111 but are includible under IRC §61 as accessions to wealth. The court drew the line that still controls Box 2 analysis today.

Morehouse v. Commissioner, 769 F.3d 616 (8th Cir. 2014), held that CRP payments to non-farmers are subject to self-employment tax, reversing the Tax Court. The IRS continues to follow Notice 2006-108 for CRP recipients on Social Security. Commissioner v. Glenshaw Glass, 348 U.S. 426 (1955), still anchors the broad definition of gross income that pulls Box 6 grants into taxable income.

Revenue Ruling 2019-11 walks through four fact patterns for SALT-capped state refunds. Revenue Ruling 93-86 addresses the taxability of state-sponsored disaster grants. Notice 2014-7 excludes certain Medicaid waiver payments from gross income, so they should not appear in Box 6.

State Nuances You Must Know

Federal law sets the form, but state quirks change the numbers. California’s EDD reports both regular UI and Disability Insurance separately, and only UI goes in Box 1. New York’s Department of Labor issues both 1099-G and 1099-INT when refunds include interest. Texas does not have a state income tax, so Texans rarely receive Box 2 amounts but often receive Box 1 unemployment from the Texas Workforce Commission.

Pennsylvania does not tax unemployment at the state level, so Box 1 is federal-only income for Pennsylvanians. New Jersey also exempts unemployment from state income tax under N.J.S.A. 54A:6-6. The consequence of treating these state rules as federal rules is over-reporting on your federal return.

Identity theft hot spots include California, Maryland, and Ohio, where state agencies have sent millions of fraudulent 1099-Gs. The Federal Trade Commission’s IdentityTheft.gov and the IRS Identity Theft Central coordinate the federal response. Each state has its own fraud reporting page, and you must file with both the state agency and the IRS to clear your record.

Penalties and Consequences for Errors

The penalty system has two sides. Payers face IRC §6721 for late, missing, or wrong returns, with tiered penalties of $60, $130, or $310 per form for tax year 2025, plus a $660 per-form penalty for intentional disregard. Payers also face IRC §6722 for failing to furnish Copy B to recipients, mirroring the same dollar tiers.

Recipients face the 20% accuracy-related penalty under IRC §6662 for substantial underreporting. Willful underreporting can trigger the 75% civil fraud penalty under IRC §6663. Criminal tax evasion under IRC §7201 carries up to five years in prison and a $250,000 fine.

Interest under IRC §6601 runs from the original due date until the balance is paid. The IRS short-term rate plus 3% sets the rate, which the IRS updates quarterly through Revenue Rulings. The consequence is that small unreported 1099-G amounts grow into much larger bills if left for years.

Frequently Asked Questions

Is unemployment compensation taxable on my federal return?

Yes. Unemployment shown in Box 1 is fully taxable under IRC §85 and reports on Schedule 1, Line 7 of Form 1040 for tax year 2025.

Do I have to report a state tax refund if I took the standard deduction?

No. The tax benefit rule under IRC §111 excludes the refund because you did not deduct state taxes, so Box 2 is informational only.

Should I report income from a fraudulent unemployment 1099-G?

No. Do not report stolen-identity unemployment; instead file Form 14039, contact the state agency, and request a corrected 1099-G showing zero.

Are pandemic stimulus checks reported on Form 1099-G?

No. Economic Impact Payments were advance refundable credits under separate law, not government payments reported on Form 1099-G.

Can I elect federal withholding on unemployment benefits?

Yes. File Form W-4V with the state unemployment agency to elect 10% federal withholding, which appears in Box 4 and reduces your balance due.

Are SBA grants reported in Box 6 always taxable?

Yes. Most taxable grants in Box 6 are includible under IRC §61, but confirm because some disaster and need-based grants qualify for the General Welfare Exclusion.

Must I file Schedule F for Box 7 farm payments?

Yes. USDA payments in Box 7 belong on Schedule F, Line 4b, and may also be subject to self-employment tax under IRC §1402.

Will the IRS catch a missing 1099-G if I do not report it?

Yes. The IRS Information Returns Master File matches every 1099-G to your Form 1040 and issues a CP2000 notice when amounts do not match.

Can I file my return before I receive Form 1099-G?

Yes. Use your state agency’s online payment history to confirm the figures, but be ready to amend if the issued 1099-G shows different numbers.

Are state lottery winnings reported on Form 1099-G?

No. Gambling and lottery winnings appear on Form W-2G, not Form 1099-G, even when paid by a state agency.

Do I owe self-employment tax on RTAA payments in Box 5?

No. RTAA wage subsidies are not self-employment income; report them on Schedule 1, Line 8z as other income.

Can a corrected 1099-G eliminate my tax liability for identity theft income?

Yes. A corrected 1099-G showing zero, paired with Form 14039, removes the fraudulent income from IRS records and your tax bill.