1099-G form for overpayment

[whc8488]

Hello,

I received 1099-G form from the state I live in and say "Overpayment". I am using TurboTax Software and I don't know where to put this 1099-G value. From Personal Income section, there are two areas for 1099-G, which is unemployment section and other income section. If I go "other income", it says "Taxable Grant", "Agriculture program payment", "Market gain on CCC loans", "RTAA payment", "Business or farm tax refund" and I am not sure where this 1099-G goes to because none of categories/sections seem right to me. Can someone help me on this?

[LenaH]

If you overpaid your state taxes last year and received a 1099-G, please follow these steps in TurboTax to enter this information:

1. Open your return.
2. Search for government payments with the magnifying glass tool on the top of the page.
3. Select the Jump to government payments link in the search results. 
4. Click Yes for the question Did you have any of these types of income? 
5. Put a checkmark next to State or local income tax refunds. 
6. Click Yes for the question Did you get a state or local tax refund in 2020? 
7. Enter the information about your refund. 

The state refund received in 2020 will only be taxable on your federal tax return if you took a federal deduction for paying those taxes in a prior year and that deduction reduced your federal taxes. 

[whc8488]

Thank you!

I am confused about two fields. It asked

• Total Refund received in 2020
• Total of all your payments and witholding

I received refund due to over-payment of estimated tax to my state. Does it mean I fill that amount to the first one (total refund received in 2020). What is the second one (total of all your payment) means?

Thank you

[npierson7]

Total refund received means the amount on the form 1099-G. Total of payments and withholdings - total of your estimated tax paid plus withholdings from your W-2(s) and 1099(s). Please, keep in mind: unless you itemized your deductions in 2019, state tax refund isn't taxable income for you.

[whc8488]

I am new to all this. I don't think I itemized deduction. I simply estimated quarterly amount myself and paid before each deadline hits. In that case should I put the amount I overpaid to "Total refund received" and 0 for total of payments and withholding?

Thank you for all the help

[MaryM428]

Contact your state department of revenue and find out what this 1099-G was issued for.  Then we will be able to advise you on how to enter it correctly in TurboTax.

[Tjbaron]

I have the same issue.  It is not a refund, it is a repayment from overzealous prepayment. We have received a 1099-G, which means we better report it, yet Ttax offers us no means to accurately do that.  Like the above person, I did not itemize, but took the standard deduction, so under no circumstances should this $ be taxable.  We are just afraid that if the software is not  smart enough to clearly guide us through this common issue, then it may mistakenly declare it to be taxable income.

We would feel much better if it was fixed to offer an “overpayment” check box option.

[CatinaT1]

In the tax world, overpayment and refund are interchangeable. They are refunding your overpayment, or your overpayment is being refunded - whichever way you prefer. 

This is only taxable (and sometimes not all of it) if you itemized the year before and used a state taxes paid deduction. If you did not itemize in the prior year, you don't have to enter it.

However, if you do enter it, TurboTax is smart enough not to tax it. You will see it as a reported item but not a taxable item.

[Yvonne48]

I have a similar but slightly different problem with this 1099G “where do I put it?”

Note: my 1099G says right at the top in large font “This is not a bill or a notice of refund.”

The situation is I didn’t have all the right information to do my taxes last year by April 15, 2025 so I did an estimate and asked for an extension and I made a large payment to both the federal government and the state of Ohio based on that estimate.  Then by October 15, 2025, I had received all the information and filed the final version of my taxes for 2024. The tax owed to the federal and state government was significantly less than what I paid with my 2025 extension estimate.

I itemized both with my estimate and then with the final submission, but it wouldn’t have been the same amount. 

It feels inappropriate to put this in the refund box. Based on how this actually went down, I don’t feel that this should be taxable income. Is there another place I can put this in the tool for this scenario? Is it possible to just omit it from the submission? Under the large print on the 1099 g is a second line of smaller, but still large print, that reads “important tax document – information only”.

Thanks.

[RogerD1]

If your 1099-G reports an amount in Box 2, that would be for receiving a state or local tax refund.  That would get reported in the Other Common Income section as State and Local Tax Refunds on Form 1099-G.  You can click Start or Update to get started.  This 1099-G is submitted to the IRS, so they will expect to see it on your return when you file it.

When this information is entered, TurboTax will use it to determine if any part of the Box 2 refund will be taxable.  If you claimed the standard deduction for the year of the refund, then none of it will be taxable.  Since you said that you made large payments on extension for federal and Ohio, if you did itemize, the payment to Ohio would have been included in your state and local tax payments as a deduction.  That doesn't necessarily mean that the full amount will be taxable income.  The State and Local tax payment cap in 2024 was $10,000, so if you had over $10,000 in state and local tax deductions, only the amount of the refund that drops the deduction amount below $10,000 may be taxable.  As an example, let's say that your total state and local taxes paid in 2024 were $11,000, and you ended up getting a state refund of $600.  This means that your actual state and local taxes paid were $10,400 ($11,000-$600), but since this amount is still above $10,000, then none of the $600 refund will be taxable.  The other part of this that the amount of itemized deductions for 2024 can't go below the standard deduction, so only the amount of the refund that would have been over the standard deduction for 2024 would be taxable (and that's only if your refund would be taxable due to the state and local payments going below the $10,000 cap.

As an example, let's say your filed single in 2024 and had $15,000 of itemized deductions of which $9,800 was state and local taxes.  Your standard deduction would have been $14,600.  When you filed your state tax return for 2024, you get a $600 refund.  Based on the state and local tax cap of $10,000, the full $600 would be taxable because your actual deduction would have been $9,200 ($9800-$600).  But your standard deduction cannot go below $14,600 so only $400 ($15,000-$14,600) of the $600refund would be taxable.

[Yvonne48]

Thank you for your reply.

I’m not stuck on the Salt tax limit – I understand that.

The reason I’m concerned, is that like I said, I had to do an extension and then a final filing for 2024, and the money that I came into that year, was ultimately deemed not to be taxable.

So, I denoted it as taxable on the initial filing, so as to take the most conservative approach, but then I got clarity (via an updated 1099) by the final filing that the income was indeed not taxable.  So both the state and federal taxes owed figures for the final filing dropped significantly— and then, of course, both the state and federal government sent me repayments for the in year overpayments (related to the extension estimates).

So, I want to note the $ amount in the tool somewhere because you said that that was important, but I feel strongly that it should not be taxable because the money that I put in to cover the “taxes owed” amount that I denoted on the extension filing was ultimately deemed not taxable and was taken out of the subsequent final filing.

Does that make sense? So I don’t want the in year repayment to be taxed because the whole underlying event that was originally denoted on the extension filing was deemed as not taxable and removed from the final 2024 filing. 

Thanks.

[RogerD1]

If you made a large payment on extension to Ohio for 2024 and that got included as an itemized deduction on your Federal return, it would have reduced your Federal tax payment for 2024.  As an example let's say you made a $2000 payment on extension to Ohio in 2024 in addition to having $3000 of withholdings for Ohio.  You claimed itemized deductions on your return that included this $5,000 of payments.  Now let's say you got back $2,500 as a refund for Ohio.  Some of that could be taxable on your 2025 return because you recovered part of a deduction you made on your Federal return in 2024.  It's what is called a taxable benefit recovery.  The amount that would be taxable would be based on the criteria I stated in my earlier post.  This is why it is important to include that 1099-G on your return, because part of it could be taxable.  And because the IRS is also in receipt of the 1099-G, if they do not see it on your return, it could result in unnecessary delays or audits of your tax return.

[Yvonne48]

• Hello. Thank you for your reply but I still have questions on how to enter this. I have now paid for your talk to an expert fee. If you are available to speak and are able to attach my username with my real information, please give me a call when you are available. Thank you.
•  

[MaxA1]

We are not able to get in contact with you here.  You will be assigned a TurboTax expert that will gladly help answer all of your remaining questions regarding your return a well as guide you through how to enter certain items in TurboTax.

@Yvonne48