In Michigan, if you have an income tax refund for the previous calendar year, you receive a 1099G with an amount in Box 2 that is the actual income tax refund receive plus any Use Tax that was paid on the Michigan 1040 of that calendar year. I see most searches on 1099G show up for unemployment income, which is NOT the scenario for my question.
My question is why is the State Use Tax paid included as a tax refund that I have to report on my Federal 1040 Schedule 1 as potential taxable income? Every year my 1099G Box 2 is higher than my actual refund received, so I did a deeper dive and see that they add Use Tax paid to come up with this value. This year my 2022 1099G seemed to have been lost in the mail.
It seems to me like taxing it twice - first is state sales/use tax and then taxed again as if it were personal income.
