A 1099-G is an IRS form a government agency sends to report payments it made to you, such as unemployment compensation or a state income tax refund. It also covers taxable grants, agricultural payments, family leave benefits, and any federal tax withheld. A copy goes to the IRS, so the amounts should match your federal return.

do I have to pay tax on a 1099-G?

Often yes. Unemployment compensation in Box 1 is fully taxable on your federal return. A state tax refund in Box 2 is taxable only if you itemized deductions and deducted that state tax in the year you paid it; if you took the standard deduction, the refund usually isn't taxable. You don't attach the form, but you must report the income.

what is the purpose of a 1099-G?

Its purpose is to document money a government agency paid you so both you and the IRS have a record of it. It reports unemployment benefits, state and local tax refunds, taxable grants, agricultural payments, and RTAA payments. You use the boxed amounts to fill out your tax return; the IRS matches its copy against what you file.

why am I being asked for a 1099-G if I didn't file for unemployment?

The most common reason is a state income tax refund reported in Box 2, not unemployment. If Box 1 shows unemployment you never claimed, it may indicate identity theft or fraud; contact the issuing state agency immediately to dispute it and request a corrected form before you file.

how long should I keep a 1099-G?

Keep it at least four years to cover the standard IRS audit window, and up to seven if it relates to income you may not have fully reported. Because it can document a prior-year state refund, hold it long enough to reconcile against the year you originally deducted that state tax.

what's the difference between a 1099-G and a 1099-NEC?

The issuer is the key difference. A 1099-G comes from a government agency reporting payments like unemployment or tax refunds. A 1099-NEC comes from a business reporting nonemployee compensation paid to a contractor. Same form family, completely different income sources.

Tax

Form 1099-G

Form 1099-G, Certain Government Payments, is an IRS information return a federal, state, or local government agency sends to report money it paid you. It most often reports unemployment compensation (Box 1) and state or local income tax refunds (Box 2), along with taxable grants, agricultural payments, and any federal tax withheld.

Government agencies must report unemployment compensation and state or local income tax refunds of $10 or more on Form 1099-G, and must send it to you and the IRS by January 31.

Source: IRS: Instructions for Form 1099-G

Written & maintained by the Granite team · Last updated October 2026

Overview

Form 1099-G reports payments a government agency made to you during the tax year, not money you earned from a business or employer. The most common reasons you receive one are collecting unemployment benefits or getting a state income tax refund the prior year. It can also report taxable grants, USDA agricultural subsidies, family leave benefits, and Reemployment Trade Adjustment Assistance (RTAA) payments.

The issuer is always a government body: a state department of revenue, a state labor or workforce agency, the USDA, or the IRS itself. Agencies must send the form to you and to the IRS by January 31, and a matching copy goes to the IRS, so the amounts need to line up with what you report on your federal return.

When you’ll get your Form 1099-G

You collected unemployment compensation during the year (Box 1)
You received a state or local income tax refund, credit, or offset (Box 2)
You got a taxable government grant (Box 6)
You received USDA or agricultural subsidy payments (Box 7)
Federal income tax was withheld from a government payment (Box 4)
You received Reemployment Trade Adjustment Assistance (RTAA) payments (Box 5)

What’s on your Form 1099-G

These are the fields you’ll find on one, and what each one tells you.

Payer name: The government agency that issued the form, e.g. a state department of revenue, state labor department, or the IRS.
Payer's TIN (Box, top-left): The agency's federal identification number (EIN-style). Sensitive; often masked.
Recipient name & TIN: Your name and Social Security number as the person who received the payments. Your SSN is usually masked (XXX-XX-NNNN).
Box 1: Unemployment compensation: Total unemployment benefits paid to you during the year. This is taxable income on your federal return.
Box 2: State/local income tax refund: Refunds, credits, or offsets of state or local income tax. May be taxable if you itemized deductions the year the tax was paid.
Box 3: Tax year of the refund: The tax year the Box 2 refund applies to; this can differ from the year the form itself was issued for. Blank means it applies to the current year.
Box 4: Federal income tax withheld: Any federal tax the agency withheld from your payment, which you claim as already-paid tax on your return.
Box 6 / Box 7: Taxable grants & agricultural payments: Taxable government grants (Box 6) and USDA or agricultural subsidy payments (Box 7), if applicable.

How long to keep it

4 years

Keep for 4 years from the date you filed the related return

Match the IRS audit window: three years for most returns, but the agency has up to six years if income was substantially understated. Because a 1099-G also reports a prior-year state refund (Box 2/3), keep it long enough to reconcile against the year you actually deducted that tax.

Figure out your exact shred date

Enter the date you filed the related return and we'll do the math.

This is general guidance, not tax advice. Your own return can change the window, so ask your tax preparer if you're unsure.

How Granite handles your Form 1099-G

Drop your 1099-G into Granite and it reads the form, identifies the issuing agency, and pulls the exact amounts (Box 1 unemployment, Box 2 refund, Box 3 refund year, Box 4 withholding) into structured fields. It auto-titles the doc (e.g. "New York State Department of Labor 2024 1099-G"), files it into that tax year's collection alongside your W-2s and other forms, and groups it under the issuing agency. When tax season hits, every government payment form surfaces in one search.

FAQ

Form 1099-G: common questions

what is a 1099-g: A 1099-G is an IRS form a government agency sends to report payments it made to you, such as unemployment compensation or a state income tax refund. It also covers taxable grants, agricultural payments, family leave benefits, and any federal tax withheld. A copy goes to the IRS, so the amounts should match your federal return.
do I have to pay tax on a 1099-G?: Often yes. Unemployment compensation in Box 1 is fully taxable on your federal return. A state tax refund in Box 2 is taxable only if you itemized deductions and deducted that state tax in the year you paid it; if you took the standard deduction, the refund usually isn't taxable. You don't attach the form, but you must report the income.
what is the purpose of a 1099-G?: Its purpose is to document money a government agency paid you so both you and the IRS have a record of it. It reports unemployment benefits, state and local tax refunds, taxable grants, agricultural payments, and RTAA payments. You use the boxed amounts to fill out your tax return; the IRS matches its copy against what you file.
why am I being asked for a 1099-G if I didn't file for unemployment?: The most common reason is a state income tax refund reported in Box 2, not unemployment. If Box 1 shows unemployment you never claimed, it may indicate identity theft or fraud; contact the issuing state agency immediately to dispute it and request a corrected form before you file.
how long should I keep a 1099-G?: Keep it at least four years to cover the standard IRS audit window, and up to seven if it relates to income you may not have fully reported. Because it can document a prior-year state refund, hold it long enough to reconcile against the year you originally deducted that state tax.
what's the difference between a 1099-G and a 1099-NEC?: The issuer is the key difference. A 1099-G comes from a government agency reporting payments like unemployment or tax refunds. A 1099-NEC comes from a business reporting nonemployee compensation paid to a contractor. Same form family, completely different income sources.

Sources

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