1099-G for Use Tax

[sethglitz]

Myself and my wife were not unemployed, yet I received a 1099-G. The refund amount is $412.00 and the tax year is for 2021.  It seems like my state took money out of my refund last year and are putting it back now for some reason.

[HelenC12]

If your 1099-G shows an amount in Box 2, that is your 2021 state income tax refund that you received in 2022. It is not related to unemployment. 

Depending on your tax situation, it may be taxable. Please see:

Do I need to report the state or local refund I got last year? Is it taxable?

Where do I enter my 1099-G for a state or local tax refund?

[Opus 17]

If you itemized your deductions last year, and deducted your state income tax, then this refund may represent a refund of a previous tax deduction and that makes it taxable.  (If you deduct a tax, and then get paid back, then you really had less to deduct.)

The taxability of the refund is determined by the "tax benefit rule" which I'm not going to explain in detail because most of the time, Turbotax does a good job of calculating if the refund is taxable to you now.  

[SteamTrain]

@sethglitz 

Yes...if you received a refund form the state last year.

....and if the state tax forms last year charged a state Use Tax that reduced your refund.

.....then the proper refund they show on the 1099-G should add -back that Use Tax to the $$ you actually received .

Why?  The Use tax is essentially a sales tax, and sales taxes are not included in state income taxes paid, for which you might have received a federal income deduction.

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The 1099-G could also be greater for some people who do state charity checkoffs that reduce the refund returned to the taxpayer....of course, if a state check-off donation is done, those $$ can then be entered as Charity donations for 2022.