I got "interest paid on tax refund" from my state, where do I report it on my taxes as income?

[u2p911]

I got a refund from my state for money I didn't owe from a previous year and received interest on that money while they had it. I got one of those forms that says "this form takes the place of federal forms 1099-G and 1099-INT". How do I report the interest money on my taxes as interest income?

[rjs]

Report the interest as a 1099-INT, the same as a 1099-INT from a bank. In the Search box type 1099-int, then click the link that says "Jump to 1099-int."

[u2p911]

When I try to add the interest as a 1099-INT the first thing it wants is who/where the interest came from, no option for my department of taxation.

[rjs]

When it asks how you want to enter your 1099-INT, select "I'll type it in myself." If you are on a page that says "Search for Your Financial Institution," it's trying to import the 1099-INT, which you can't do. At the bottom of that page click the button that says "Skip Search." Once you get to the screen for entering the 1099-INT you can type the department name in the "Received from" box and enter the amount.

[u2p911]

Once I click on "I'll type it in myself." I see where I can type in the department, but then do I put my interest amount in box 1? On my form the interest amount is in box 2.

[rjs]

Are you sure you're looking at the interest and not the tax refund? On a standard IRS Form 1099-G a state income tax refund would be in box 2. But your Department of Taxation might be doing something nonstandard on their combined 1099-G and 1099-INT. Maybe they made up their own form and didn't follow IRS rules. In any case, enter the interest income in box 1 of the 1099-INT, even if you have a nonstandard form that uses a different box number.

[u2p911]

It’s a very basic form.

Box 1 - Income Tax Refunds, Credits, or Offsets

Box 2 - Interest Paid on Tax Refund

Box 3 - Tax Year

[u2p911]

This is what I got…

https://www.city-data.com/forum/northern-virginia/3139864-va-refund-1099g.html

[rjs]

Sure enough, Virginia made up their own nonstandard form.

The refund in box 1 goes in box 2 of Form 1099-G.

The interest in box 2 goes in box 1 of Form 1099-INT.

The year in box 3 goes in box 3 of Form 1099-G.

[u2p911]

I will put the amount in box 2 on my VA form into box 1 of the 1099-INT form as you stated. Thank you so much for all the help!