Received 1099-G for a taxable grant (box 6) from the EWF. They withheld $780 in state taxes and stated that federal income taxes may still be due. How do I enter this?

I put the $15,600 taxable grant under "other income" and state tax withheld in box 11 of 1099-g under "unemployment compensation".

However, it's stating I owe about $3k in federal taxes and $1k in state taxes which makes no sense to me. The grant was for $15,600 and the state taxes were taken out before I received it. Please provide any guidance.

150

Expert Alumni

Feb 19, 2022 1:46:47 PM

Your tax depends on your total income. If your grant pushed up your total tax rate, the withholding on the grant may not be enough to cover the tax due.

As for your state, I can't tell you what's happening without knowing what state you lived in. Some states have a flat tax. Other states have a graduated system like the federal government where the tax goes up with income.

If you ae in a flat tax state, your withholding (5%) should cover the grant income. If you are in a graduated tax state, it may not. The tax rate on the grant (11%) seems high for any state.

Check your state tax summary to make sure TurboTax included the state withholding.

In TurboTax online:

Select Tax Tools in the left column
Then Tools
Select View Tax Summary in the center box
Select (State) Tax Summary in the left column
Verify the state withholding is included in Total payments
Select Back when you are done

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Received 1099-G for a taxable grant (box 6) from the EWF. They withheld $780 in state taxes and stated that federal income taxes may still be due. How do I enter this?