Types

• Multiple types of income issued by government agencies are listed on Form 1099-G, including unemployment compensation, government paid leave, tax credits or refunds, agricultural payments and taxable grant funds.
  
  

Time Frame

• Income listed on a 1099-G is from the previous tax year. For example, income earned from government sources between Jan. 1, 2010, and Dec. 31, 2010, would be reported on the 1099-G form sent in early 2011. Government agencies must send a 1099-G to each recipient by Jan. 31.
  
  

Identification

• Look in the upper right corner of the form for the tax year, such as 2010. If it says "1099-G" underneath the year, the form is a 1099-G. Other types of 1099 forms include 1099-G, 1099-INT and 1099-MISC.
  
  

Potential

• The income reported on form 1099-G may impact your overall tax liability. Certain forms of government income are taxable.
  
  Information on a 1099-G form may require you to amend previous federal tax returns. For example, if you itemize deductions on Form 1040, you may elect to deduct either the state and local income tax or state and local sales tax that you paid during the previous year. If you elect to deduct state income tax and later receive a state income tax refund, that refund is reported on Form 1099-G. Since your original deduction was for more than you actually paid, given the credit you received, you will have to amend your previous tax return to lower the deduction amount and likely pay taxes on the credit amount.
  
  

Considerations

• All government agencies or representatives must file a copy of 1099-G whenever they distribute funds to individuals. They must file one copy of the form with the Internal Revenue Service and file a second copy with the individual who received the payment. Only official IRS forms or approved software can create scannable 1099-G forms; you cannot print forms directly from the IRS website. Filing a 1099-G form that cannot be scanned by the IRS may result in a fine of $50 per form.
  
  

Warning

• You are responsible for paying taxes on all taxable income, regardless of whether you receive a 1099-G form. You may owe interest and fines on back taxes owed on unreported income.
  
  Since all 1099-G forms are simultaneously filed with the IRS, the government expects the 1099-G income to be listed on your federal tax return. Failing to report income on a filed 1099 form may trigger a tax audit.