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Level 1

How to deal with a 1099-G?

Received a 1099-G from the State of Wisconsin for 2018. I received money from a non-qualified pension plan from which taxes were supposed to have been collected in the State of Arkansas for 2017. The distribution agent somehow used my old address from when I was still living in Wisconsin over 2 years prior (2015) when filing the W-2. I had to obtain a corrected W-2 from the distribution agent and file it with the State of Arkansas for my 2017 tax return. I also had to file a non-resident tax form with the State of Wisconsin to recover all of the funds erroneously paid to Wisconsin by the distribution agent. I reported the full amount in Arkansas for 2017, and paid taxes accordingly.  My question is how to deal with this 1099-G form from Wisconsin. It shows up on the 1099-G form as a tax refund. Since I reported the income to the State of Arkansas last year, am I going to be hit for taxes again in Arkansas for the “refund” as shown by Wisconsin? How do I deal with this so I do not get ta ed again for 2018?

1 Best answer

Accepted Solutions
Level 9

How to deal with a 1099-G?

First of all, if you used the Standard Deduction on your 2017 Federal tax return, state refunds received in 2018 are not claimed as income. 

If you Itemized on your 2017 Federal return (used Schedule A) and you claimed State Income tax paid (rather than State Sales tax) you may need to claim the refund as income. 

(if you used the state sales tax, the refund is again not reported)

So if you did Itemize on your 2017 Federal tax return, and claimed state income tax paid, 

enter the Wisconsin refund as income

ALSO enter the Arkansas tax you paid in 2018 as a deduction (since that tax was not on your 2017 W-2, so was not claimed on your 2017 Federal return)

View solution in original post

1 Reply
Level 9

How to deal with a 1099-G?

First of all, if you used the Standard Deduction on your 2017 Federal tax return, state refunds received in 2018 are not claimed as income. 

If you Itemized on your 2017 Federal return (used Schedule A) and you claimed State Income tax paid (rather than State Sales tax) you may need to claim the refund as income. 

(if you used the state sales tax, the refund is again not reported)

So if you did Itemize on your 2017 Federal tax return, and claimed state income tax paid, 

enter the Wisconsin refund as income

ALSO enter the Arkansas tax you paid in 2018 as a deduction (since that tax was not on your 2017 W-2, so was not claimed on your 2017 Federal return)

View solution in original post