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Let’s talk about a tax reporting form people tend to forget about, the 1099-G.
“G” in this case stands for “Government” (the full name is Certain Government Payments) and the form is used to report to the IRS payments made by a government entity to a taxpayer. You as the taxpayer get copied on it.
The key takeaway here is the IRS will know about these payments to you, so you really should report them on your tax return as needed – don’t ignore them.
Many states nowadays make these available online rather than mailing them to you. So, go onto your favorite search engine and do a search using the state you reside in and “online individual tax account” and set up your account now if you haven’t already.
In Connecticut, you can find that account here: https://portal.ct.gov/drs/myconnect/myconnect
These online accounts (including the federal one here https://www.irs.gov/payments/online-account-for-individuals) are useful for seeing balances owed, making payments, and checking correspondence from the authorities.
As tax filing time grows ever nearer, you should go ahead and register for your online account and be ready to retrieve any 1099-Gs issued to you (the deadline for government entities to furnish you a copy is January 31). In many cases, a state’s online account is the only way to get your 1099-G in a timely manner.
Here’s a list of the payments that may trigger a 1099-G filing:
- Payment of unemployment benefits (By the way, these are taxable at the federal level and often also the state level).
- State or local tax refunds (could be taxable at the federal level)
- Government grants and assistance payments (like disaster relief, taxable business or individual assistance and other state/local grants)
- Agricultural program payments
- Market gain from certain specialized investment programs
- Reemployment Trade Adjustment Assistance (RTAA)
We’re here to help at Sunstone Bookkeeping and Tax Solutions, so give a shout if you need us: info@sunstonebookkeping.com.