Form 1099-G: Reporting Unemployment & Government Payments

September 2, 2025 by Connie
Tax Specialist & Director of Quality Assurance with 15+ years committed to making taxes less stressful and more accessible.

It's January you check your mail and see Form 1099-G. There are multiple reasons this form is sent. You need to determine what type of income you are reporting and if you are required to report it at all!

Income Reported on Form 1099-G

Most common reasons for getting a Form 1099-G is when you had:

• Box 1 - Unemployment compensation
• Box 2 - State/local income tax refunds, credits, or offsets

Other income that is reported, but not as common:

• Box 5 - Shows reemployment trade adjustment assistance (RTAA) payments you received.
• Box 6 - Taxable grants
• Box 7 - Taxable Department of Agriculture payments
• Box 9 - Shows market gain on CCC loans whether repaid using cash or CCC certificates.

Rules regarding state income tax refunds

• If you took the itemized deduction last year this is required to be included as income on Schedule 1 of your tax return.
• Those that took the state standard deduction generally this is not reported as income.
• If Box 8 is checked, the amount is coming from a business and may need to be reported on Schedule C or Schedule F.