Where Do I Put My 1099-G on My Tax Return?

On a federal return, most 1099-G amounts land on Schedule 1 (Form 1040), which then feeds into your Form 1040. That’s the short answer to where to report a 1099-G on your tax return: unemployment compensation from Box 1 goes on Schedule 1, Line 7; a taxable state or local income tax refund from Box 2 goes on Schedule 1, Line 1; and any federal income tax already withheld, shown in Box 4, is claimed as a credit on Form 1040, Line 25b.

Box 1 Unemployment Compensation Goes on Schedule 1, Line 7

Federal law treats unemployment benefits as taxable income.1Office of the Law Revision Counsel. 26 USC 85 – Unemployment Compensation That covers regular state unemployment, extended benefits, Trade Adjustment Assistance, Disaster Unemployment Assistance, and railroad unemployment. Whatever appears in Box 1 of your 1099-G goes on Schedule 1 (Form 1040), Part I, Line 7.2IRS.gov. 2025 Schedule 1 (Form 1040)

Once entered, it combines with any other additional income on Schedule 1, and the Schedule 1 total flows to Form 1040 as part of your adjusted gross income. Your state agency sent the IRS a copy of the same 1099-G. Leave the amount off and the automated matching system will flag it.

Box 2 State or Local Tax Refund Goes on Schedule 1, Line 1 (Only if You Itemized)

A state or local income tax refund reported in Box 2 is not automatically taxable. It only counts as income if you itemized deductions on last year’s federal return and claimed state or local income taxes on Schedule A. This is the tax benefit rule: if a deduction reduced your tax in a prior year, recovering that money means you include it in income the year you get it back.3Office of the Law Revision Counsel. 26 USC 111 – Recovery of Tax Benefit Items

If you took the standard deduction last year, ignore Box 2. If you itemized, put the taxable portion on Schedule 1, Part I, Line 1.2IRS.gov. 2025 Schedule 1 (Form 1040)

The SALT Cap Can Shrink the Taxable Portion

Even if you itemized, the refund may not be fully taxable. The state and local tax deduction is capped, and for 2026 that cap is $40,400 for most filers ($20,200 for married filing separately). The cap phases down once your modified adjusted gross income exceeds $505,000 ($252,500 for married filing separately). If your state and local taxes exceeded the cap, you didn’t get a full deduction for what you paid, so the refund of that excess didn’t reduce your prior-year tax. Part or all of your Box 2 refund may be excludable under the tax benefit rule.

To work this out, pull up last year’s Schedule A and compare your actual state tax deduction to what you paid. The worksheet in the Schedule 1 instructions walks through the calculation. Tax software usually handles it automatically; if you’re filing by hand, this is the step people most often get wrong.

Box 4 Federal Tax Withheld Goes on Form 1040, Line 25b

Box 4 shows federal income tax already withheld from your government payments. It isn’t additional income; it’s money the payer already sent to the IRS on your behalf. Report it on Form 1040, Line 25b.4Internal Revenue Service. Instructions for Form 1040 (2024) Line 25b gathers withholding from 1099 forms, including amounts withheld from unemployment benefits and other government payments.

Every dollar of withholding you fail to claim is a dollar you’ve already paid but aren’t getting credit for. It reduces your tax bill or increases your refund directly.

Setting Up Withholding Going Forward

If you received unemployment without any withholding and ended up owing tax, file Form W-4V (Voluntary Withholding Request) with the paying agency for next year. For unemployment compensation, the only option is a flat 10% withheld from each payment.5IRS.gov. Form W-4V – Voluntary Withholding Request Give the completed form to the payer, not to the IRS.

Where the Other 1099-G Boxes Go

Unemployment and state refunds are the most common items, but the form has other boxes, each with its own line.

All of these amounts eventually reach Form 1040 through Schedule 1 or Schedule F, so they’re part of your adjusted gross income just like wages.

If Your 1099-G Is Wrong or Reports Benefits You Never Got

If the amounts don’t match what you actually received, contact the issuing agency and ask for a corrected form before filing. Compare the numbers to your bank statements or payment records.

A more serious problem: receiving a 1099-G for unemployment benefits you never applied for. That usually means someone filed a fraudulent claim using your identity. The IRS advises the following steps:

  • Report the fraud to the state workforce agency that issued the 1099-G and request a corrected form showing zero benefits. The Department of Labor maintains a list of state contacts at DOL.gov/fraud.8Internal Revenue Service. Identity Theft and Unemployment Benefits
  • File your return with only the income you actually received, even if a corrected 1099-G hasn’t arrived yet. Do not include the fraudulent amount.8Internal Revenue Service. Identity Theft and Unemployment Benefits
  • Do not file Form 14039 (Identity Theft Affidavit) unless the IRS specifically instructs you to, or your e-filed return is rejected because a duplicate return was already filed with your Social Security number.8Internal Revenue Service. Identity Theft and Unemployment Benefits
  • Consider signing up for an IRS Identity Protection PIN, which must accompany any return filed under your Social Security number.

If the state won’t issue a corrected form in time, file accurately anyway. IRS guidance is clear: report only what you received, and keep documentation of the fraud report.9Internal Revenue Service. What to Do When a W-2 or Form 1099 Is Missing or Incorrect

What Happens if You Leave 1099-G Income Off

The IRS gets its own copy of every 1099-G. Automated matching flags returns where reported income doesn’t line up with what payers reported. Skip an unemployment payment or grant and you should expect a notice.

The accuracy-related penalty is 20% of the underpaid tax.10Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty The IRS lists “not including income on your tax return that was shown in an information return, like income reported on Form 1099” as an example of negligence that triggers it.11Internal Revenue Service. Accuracy-Related Penalty Interest on the unpaid tax runs from the original due date. A separate substantial-understatement penalty at the same 20% rate applies if the understatement exceeds the greater of 10% of the tax due or $5,000.

The fix is to enter every 1099-G box on the correct line before you file, even when the amounts look small.