IRS Form 1099-G, Certain Government Payments is provided to a taxpayer or entity that received certain payments from federal, state, or local governments. Generally, these payments are taxable income.
Box 1 - Unemployment Compensation. Amounts reported in this box include:
- Unemployment compensation;
- Railroad Retirement Board payments for unemployment;
- Payments from a contributory program that has been deemed to be essentially unemployment compensation.
For more information on Unemployment Compensation click here.
Box 2 - State or local income tax refunds, credits, or offsets. Amounts reported in this box include:
- Refund of state or local income taxes from last year's tax return;
- Refunds or carryforward credits of overpayments of tax due to refundable state tax credits and incentive payments;
- Refund, credit, or offset of tax on the net taxable income of an unincorporated business;
- Refund, credit, or offset of tax on dividends or tax on capital gains, if the taxpayer itemized deductions.
If the taxpayer itemized their deductions on their federal return, including deducting state or local income taxes, the refund may be considered taxable income.
If the check box in Box 8 is checked, this amount is reported on Schedule C or F as appropriate.
For more information on State & Local Refunds click here.
Box 5 - Reemployment Trade Adjustment Assistance (RTAA) payments. RTAA payments of $600 or more are reported in Box 5. These benefits are paid by the state as supplemental pay to re-employed workers.
Box 5 income is reported as Other Income on Form 1040.
Box 6 - Taxable grants. Grants of $600 or more are reported in this box and include:
- Grants for subsidized energy financing.
- Grants for projects that produce or conserve energy.
- Taxable grants administered by an Indian tribal government.
- Grants to under-represented business owners (i.e. women-owned, minority-owned.)
Taxable grants are part of Other Income on Form 1040 unless the item relates to an activity for which the taxpayer is required to file Schedule C, E, or F or Form 4835. In such situations, the taxpayer would instead report the taxable amount on that schedule or form.
For more information on where to report a taxable grant click here.
Box 7 - Agricultural payments. The amount in this box is typically a subsidy paid to a farmer or fisher and is reported on Schedule F.
Box 8 - Trade or Business Income. An X in this box indicates that the amount in Box 2 relates exclusively to a trade or business, so the amount will be reported on Schedule C or F, as appropriate.
Box 9 - Market Gain. The amount in this box represents the market gain associated with the repayment of a Commodity Credit Corporation (CCC) loan. The CCC is a government-owned and operated entity that was created in 1933 to stabilize, support, and protect farm income and prices.
This amount is reported under Agricultural Program Payments in Schedule F but only if the taxpayer didn't elect to report the CCC loan proceeds as income in the year received.
For information on entering into Schedule F in TaxSlayer Pro click here.
Note: This is a guide on entering 1099-G, Certain Government Payment items into the TaxSlayer Pro program. This is not intended as tax advice.