Form 1099-G on Tax Return Guide – If you received unemployment benefits, a state or local tax refund, or other government payments in 2025, you likely got a Form 1099-G, Certain Government Payments. This IRS information return helps you accurately report these amounts on your 2025 federal tax return (filed in 2026). Understanding how to report Form 1099-G prevents errors, avoids penalties, and ensures you claim any available deductions or credits.
This comprehensive guide explains what Form 1099-G is, how to interpret each box, where to enter the amounts on your Form 1040 (or 1040-SR), and key tips for the current tax year. All information is based on official IRS sources as of April 2026.
What Is Form 1099-G?
Form 1099-G reports certain government payments made by federal, state, or local agencies. The most common entries include:
- Unemployment compensation
- State or local income tax refunds, credits, or offsets
- Reemployment Trade Adjustment Assistance (RTAA) payments
- Taxable grants
- Agricultural payments
Governments must issue Form 1099-G for payments of $10 or more in most cases (or $600 for some items). You receive Copy B for your records; the agency sends Copy A to the IRS.
Important for 2025 tax year: A new Box 10 reports family leave benefits under state paid family and medical leave programs (per Rev. Rul. 2025-4). State information boxes have been renumbered accordingly. Always use the latest version of the form and instructions from IRS.gov.
Who Receives Form 1099-G?
You will receive a Form 1099-G if you:
- Collected unemployment compensation (including from state programs or the Railroad Retirement Board)
- Received a state or local income tax refund, credit, or offset in 2025
- Got RTAA payments, taxable grants, or certain agricultural subsidies
- Had federal income tax withheld from any of these payments
Note on identity theft: If Box 1 shows unemployment benefits you did not receive, do not report the incorrect amount. Contact your state unemployment agency immediately and visit IRS.gov/idtheftunemployment for guidance.
Understanding the Boxes on Form 1099-G (2025/2026 Filing)
Here’s exactly what each box means and how it affects your taxes (based on the official Form 1099-G and recipient instructions):
- Box 1: Unemployment Compensation — Total unemployment benefits paid to you in 2025. This is almost always fully taxable.
- Box 2: State or Local Income Tax Refunds, Credits, or Offsets — Refund or credit of state/local taxes you received. Taxable only if you itemized deductions on your prior-year return and benefited from the deduction.
- Box 3: Box 2 Amount Is for Tax Year — The year the refund relates to (helps determine taxability).
- Box 4: Federal Income Tax Withheld — Backup withholding or voluntary withholding you requested. This is a credit against your tax liability.
- Box 5: RTAA Payments — Reemployment Trade Adjustment Assistance payments (taxable).
- Box 6: Taxable Grants — Taxable grants from federal, state, or local governments.
- Box 7: Agriculture Payments — Taxable USDA or related agricultural payments (including nominee payments).
- Box 8: Check if Box 2 Is Trade or Business Income — If checked, report the Box 2 amount on Schedule C or F instead of as general income.
- Box 9: Market Gain — Market gain on repaid Commodity Credit Corporation (CCC) loans.
- Box 10: Family Leave Benefits (New for 2025) — Payments under state paid family and medical leave programs (report similarly to unemployment compensation).
- Boxes 10a–12 (Renumbered) — State tax withheld and state identification information (use for your state return if required).
How to Report Unemployment Compensation (Box 1) on Your 2025 Tax Return?
Unemployment compensation is taxable income. Follow these steps:
- Combine Box 1 amounts from all Forms 1099-G you received.
- Report the total on Schedule 1 (Form 1040), line 7 (“Unemployment compensation”).
- Enter any repayment of a 2025 overpayment in the checkbox and amount field on line 7 if applicable.
- The amount flows to Form 1040, line 8 (additional income).
Special rule for contributory programs (e.g., certain state family leave or disability programs): If you contributed to the program, you may deduct your contributions on Schedule A (if you itemize) and report only the excess as income. A separate Form 1099-G is issued for these payments.
How to Report State or Local Tax Refunds (Box 2)?
Not every state tax refund is taxable. Use the IRS State and Local Income Tax Refund Worksheet in your Form 1040 instructions.
- If you took the standard deduction in the prior year → Generally not taxable.
- If you itemized deductions → The refund is taxable to the extent it reduced your federal tax in the prior year.
- Report the taxable portion on Schedule 1 (Form 1040), line 1 (“Taxable refunds, credits, or offsets of state and local income taxes”).
If Box 8 is checked, report on Schedule C or F instead.
Pro tip: Even if you didn’t receive the cash (it was offset against debts or applied to estimated taxes), it may still be taxable if you deducted the original taxes.
Reporting Other Boxes on Form 1099-G
- Box 4 (Federal tax withheld): Enter on Form 1040, line 25b (or the appropriate withholding line).
- Box 5 (RTAA), Box 6 (Taxable grants), Box 7 (Agriculture payments), Box 9 (Market gain): Report on Schedule 1, line 8z (“Other income”) and describe the type.
- Box 10 (Family leave benefits): Treat like Box 1 unemployment compensation unless your state program has special rules.
- State boxes (10a–12): Use only for your state income tax return.
Common Mistakes to Avoid with Form 1099-G
- Reporting a fraudulent unemployment amount in Box 1.
- Forgetting to check whether a Box 2 refund is actually taxable.
- Not combining multiple Forms 1099-G.
- Overlooking Box 4 withholding credit.
- Missing the new Box 10 family leave benefits reporting.
Double-check your return with tax software or a professional. You do not attach Form 1099-G to your return unless the IRS specifically asks.
What If Your Form 1099-G Is Incorrect or You Didn’t Receive One?
- Contact the issuing agency (usually your state labor or revenue department) for a corrected form.
- If you received benefits but no form, log into your state unemployment portal or request a duplicate.
- Report only the actual income you received—even without the form. Keep records.
Form 1099-G Filing Deadlines and Tips for 2026
- Agencies must send Forms 1099-G by January 31, 2026.
- Your 2025 tax return is generally due April 15, 2026 (or October 15 with extension).
- Free File, IRS Direct File, or commercial software makes entering 1099-G simple—most auto-import from state portals.
Frequently Asked Questions About Form 1099-G
Is unemployment compensation taxable in every state?
Federal tax: Yes. State tax: Varies—some states do not tax it.
Do I need to repay unemployment if I get a 1099-G?
No. The 1099-G simply reports what you already received.
What if I repaid unemployment benefits in 2025?
Check the box on Schedule 1, line 7 and enter the repaid amount (see IRS instructions for details).
Can I e-file with a 1099-G?
Yes—tax software handles it easily.
Final Tips for a Smooth Tax Return with Form 1099-G
Keep your Form 1099-G with your tax records for at least three years. Use IRS Free File if your income qualifies, or consult a tax professional if your situation involves itemized deductions, business income, or multiple states.
For the most up-to-date instructions, visit IRS.gov/Form1099G or download the latest Schedule 1 and Form 1040 instructions.
Accurate reporting of your Form 1099-G protects you from underpayment penalties and ensures you pay only what you owe. If you have questions specific to your situation, use the IRS Interactive Tax Assistant or speak with a qualified tax preparer.
This guide is for informational purposes only and is not tax advice. Tax laws can change; always verify with official IRS publications for your 2025 return.