What is the 1099-G for?

If the 1099-G was issued for a state tax refund it should be entered in the state refund section, rather than the general 1099-G section:

To enter your state refund, reported to you on Form 1099-G, please follow these steps:

1. Click on Federal > Wages & Income  
2. In the Other Common Income section, click on the Start/Update box next Refunds Received for State/Local Tax Return.   
3. On the screen, Did You Get a State or Local Tax Refund Last Year? click the Yes box.

Box 2 is for a state refund.

If it’s asking why you got a 1099G you are in the wrong place.  Delete out of this one.

To enter a state refund just type  1099-G (with the dash)  in the search box at the top of your return and click on Jump To it.
 
OR  Enter the 1099G under
 Federal on left
Wages & Income at top
 Scroll down to 1099-Misc and  Other Common Income
      You might need click on Show More to expand the section

Then it's the first line for Refunds Received for State/Local Tax Returns - Click Start
     You do not want the next line that says Other 1099G Income
 
On the first screen check YES - Received a State Refund.