Do I need to amend? I mistook a 1099-G as unemployment/paid leave when it was for a state refund

[XE]

Hi. I went on paid family leave in Nov 2017 because I had my baby. I received a 1099-G from State of CA. I thought that's what the 1099-G was for. I filed my tax return with $ in the box stated for unemployment (and paid family leave). Note I was always employed, never received unemployment.

After putting away the paperwork, I read closer and realized the 1099-G was for our 2016 state income tax refund. I thought it was weird that I didn't put anything in that box.

My net tax due/refund will not change. The 1099-G was provided by State of CA for either situation (paid leave or state income tax refund). The classification is simply wrong (unemployment instead of state income tax refund).

I'm worried the IRS will think I'm not including my last year's state income tax refund as income. I did, but I put it in the wrong box. Do I need to amend my tax return? Does amending a tax return create a bigger audit risk? Especially if my amount due or refund doesn't change?

[PaulaM]

Amending in itself would not create a bigger audit risk. Did you itemize your 2016 deductions? If you took the standard deduction then you would not need to include the 1099-G at all and an amendment would be filed to remove the form.

If you did itemize, then I am inclined to say wait an see if the IRS corrects it on their end, since no additional taxes are owed. They receive the 1099-G form too and will see that it has been mislabeled on your return. Keep your records should you need to explain. Also, there is no rush to amend. You have 3 years from the due date to file an amended return should you need to do so.