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 entered on the tax return and considered to be taxable income. Following are kinds of payments and where they are reported on Form 1099-G.
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.
Click here for more information on Unemployment Compensation.
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.
Click here for more information on entering state and local refunds.
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.
Form 1099-G Box 5 income is reported as Other Income on Form 1040. Click here for more information.
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 or deductible amount allocable to the activity on that schedule or form.
For more information on where to report receipt of a taxable grant click here.
Note that scholarships and education grants are not reported on Form 1099-G.
Box 7 - Agricultural payments. The amount in this box is typically a subsidy paid to farmers or fishers and is typically reported on Schedule F.
See also the IRS instructions for Schedule F and IRS Publication 225 if needed.
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.
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 as income in Schedule F.
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.
IRS: Instructions for Form 1099-G - Certain Government Payments