Letter from state of Nebraska Dept of Revenue--Form 1099-G Certain Government Payments box 2 $51.00 for yr 2020

[dshusker1]

Instructions for the Recipient- This is important tax information and is being furnished to the Internal Revenue Service. If the IRS determines that this income has not been reported and you are required to file a federal return, a negligence penalty or other sanction may be imposed on you by the IRS.

Box 2. The amount shown in box 2 may be taxable on you 2021 federal income tax return if you deducted state and local income tax paid on Schedule A of your 2020 federal return. The Nebraska DOR issued this form 1099-G  because you itemized deductions on your Nebraska income tax return and your return calculated an overpayment. DOR reports the overpayment in the year the overpayment was processed and this overpayment may be considered income for federal tax purposes. See the federal return instructions to determine if some or all of the amount is taxable on you 2021 federal income tax return. The amount in box 2 may not match the amount of your actual refund received because of all or some of your overpayment was used to pay for certain items.

[LenaH]

Yes, report last year’s state or local tax refund, and we’ll figure out if it’s taxable or not.

If all three of the following are true, your refund counts as taxable income:

• You itemized deductions last year, instead of taking the standard deduction
• You claimed state and local income taxes (not general sales taxes)
• Claiming the deduction helped you increase your federal refund or lower your tax bill

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill. Just answer a few simple questions about last year’s refund, and we’ll calculate the taxable amount for you.

To report your 1099-G reflecting a state or local refund, follow these instructions:

1. With your return open in TurboTax, select Wages & Income to open the Wages and income summary screen.
2. Scroll down to Other Common Income and select Show more.
3. Then select Start next to Refunds Received for State/Local Tax Returns. This will take you to Did you get a state or local tax refund? screen, answer Yes.
4. On the following screen, enter the info from your 1099-G and Continue.
5. If you have any other refund forms to enter, you can select + Add Another State or Local Tax Refund on the State and Local Tax Refund Summary screen. If not, select Done and answer a few more questions about your refund.