What is IRS Tax Form 1099-G?
You may have received Form 1099-G from your state or the federal government. Form 1099-G is an information return used by the government to report any income from federal or government sources. The IRS requires that government agencies report payments made during the tax year because those payments may be considered taxable income.
Income that listed on Form 1099-G may be required to be reported on Form 1040 or other tax returns. Some of the types of payments that may be included on Form 1099-G include state and local tax refunds, grant income, subsidies, unemployment benefits, disability insurance benefits and more. Form 1099-G should be received by the taxpayer by January 31st. If a 1099-G form has not been received by the end of January, the state, federal, or local agency that made payments to the taxpayer should be notified.
It should be noted that although Form 1099-G reports the total amount of unemployment benefits received during the year, the American Recovery and Reinvestment Act allows for the first $2,400 of unemployment benefits to not be taxed by the government. However, this ruling only applies for the 2009 tax year and onward.
Another issue to note is that although disability insurance benefits are not considered taxable, that disability benefits that are considered a substitute for unemployment insurance are considered taxable. For example, if an employee must leave work due to a disability, their disability benefits are not considered to be taxable. However, if a person is already receiving unemployment insurance and then becomes disabled and begins receiving disability benefits, then those benefits are considered a substitute for unemployment insurance and are taxable.
Form 1099-G is one of types of several information returns that are used to report taxable and non-taxable payments.