Form 1099-G is an income statement from the government, not a bill. This income is considered taxable and must be included on your federal and state returns.
DOR must report any refund, credit or offset of state and county income made to individuals who claimed itemized deductions on their federal income tax returns as well as any interest paid.
DOR cannot net the amount against other transactions. Therefore, your Form 1099-G is correct as issued. For information on how to report the income and deduct your payment on your federal return, review IRS 1099-G information.
Unemployment
Unemployment compensation is taxable on both federal and state tax returns.
If you received unemployment compensation, use the 1099-G issued by the Department of Workforce Development and include it in your tax return.
FAQ
- Why did I receive a 1099-G?
DOR's records show that we issued you a refund or overpayment credit for the taxable year shown in Box 3. You may be required to report the refund or credit as income on your federal income tax return.
- Do I have to report my refund as income?
You may have to report a state refund received in the tax year as income if you claimed itemized deductions on your federal income tax return for a previous tax year. Review the federal return instructions for reporting state tax refunds if you prepare your taxes, or visit the IRS website for more information.
- I itemized my deductions last year but haven't received a 1099-G yet. Is it too late to get one?
Form 1099-G statements are usually mailed around Jan. 1. If you haven't received a statement by Feb. 1, message us through INTIME or contact us by phone.
- Can a DOR-issued 1099-G be reissued if it is incorrect?
Yes. Message us through INTIME or contact us by phone. Have the correct information on hand and be prepared to explain why you believe what you received is incorrect.
- This statement shows a refund amount that includes interest. What am I supposed to report as income?
You may need to report both amounts as income. If so, the interest would be included with the other interest income you report on your federal return. You are still required to report the interest as income even if the refund is not reportable as income. For information on federal reporting requirements, visit the IRS website.
- I claimed a refund from Indiana, but DOR applied the money to a tax bill I owed for another year. Does this mean the statement is wrong? Do I still have to report this as income?
Indiana law requires refunds to be applied to outstanding billings or other agency offsets. The application of funds doesn't change the fact that you claimed an overpayment for the year on your tax return. Even though you didn't actually receive money, an overpayment transaction took place, and you are subject to the same federal reporting requirements as if you had received a refund.
- I showed an overpayment on my state tax return, but I had the money applied as a credit (estimated tax payment) to my account. Since I didn't get a refund, do I still have to report this?
A refund and a credit are simply different types of overpayment transactions. We must include any overpayment allowed on your tax return, whether issued as a refund or as a credit, on your Form 1099-G. As a result, you are subject to the same federal reporting requirements as if you had received a refund check.
- This statement says the refund was issued for a previous tax year, but I already reported that refund on my current federal tax return. Can you correct the statement? If not, what should I do?
DOR is required to report refund transactions in the year they actually occur. Since your previous tax year refund was issued in the current year, DOR cannot issue a Form 1099-G as if the transaction happened in a previous year. Contact the Internal Revenue Service to determine whether you should amend your federal return or take other action to correct the reporting error.