I collected unemployment in 2017 but opted to have taxes taken out so that I wouldn't be hit by a large tax bill. I still received a 1099-G. Is this right?

[samantharoy]

The form says that Box 2 shows refunds, credits or offsets of state or local income tax I have received.  I'm confused.

[IsabellaG · Accepted solution]

Yes, you should still receive a 1099-G for your unemployment compensation, but if you had taxes taken out of your unemployment, that should show up in box 4 as federal tax withheld. This is just like the way it works with a W-2 for your job.

[samantharoy]

The form I received from the state says 1099-G but looks nothing like that form.  There is a box 2 and box 3 but they are just haphazardly thrown at the bottom of the page.

[IsabellaG]

In which state did you receive unemployment?

[samantharoy]

Rhode Island

[IsabellaG]

According to the RI unemployment website <a rel="nofollow" target="_blank" href="http://www.dlt.ri.gov/ui/BenefitRights.htm:">http://www.dlt.ri.gov/ui/BenefitRights.htm:</a>

" Is Unemployment Insurance Benefits Taxable? YES. You may choose to have a percentage of your weekly benefit amount withheld for Federal and State Income Taxes. Information on how to apply for this is sent to you when you file your claim. Form 1099 is sent to you by January 31st telling you the benefits paid and amounts withheld during the previous year."  

So they do withhold if you request it. You can go here to download your 1099-G to see if it looks any different from the one you have: <a rel="nofollow" target="_blank" href="http://www.dlt.ri.gov/ui/ChangeAdd1099.htm">http://www.dlt.ri.gov/ui/ChangeAdd1099.htm</a>

Or you can call them to see what information they can provide. Did you get any statements or stubs showing withholding for the time you were receiving benefits? That might be a place to start.

[VolvoGirl]

You probably will get another 1099G for the unemployment or you need to get the info from the state’s website.  The 1099G you have is for a state tax return refund you got in 2017, probably for your 2016 return.  It gets entered in a different place than unemployment.

A state refund may or may not be taxable.  It is taxable if you itemized deductions last year.  If you took the standard deduction it is not taxable.  If you Itemized and took the state income tax deduction instead of the sales tax deduction on schedule A line 5 you got a deduction for it.  So now the refund can be taxable.

You can type 1099-G (with the dash) into the search box at the top of your return and hit find.  It should give you a Jump To link to take you right to it.

Enter the 1099G box2 for a state refund under
 Federal on left
Wages & Income at the top
Then scroll down to Other Common Income

Then it's the line - STATE AND LOCAL TAX REFUNDS - Click the Start or Update button on the right.   (You do not want the next line that says Other 1099-G Income. And not the top line that says Visit All).

On the first screen check YES - Received a State Refund.

[fanfare]

Go to your state's unemployment site for the 1099 related to unemployment benefits.