I Received a 1099-G for a State/Local Refund. Where Do I Enter This in the OLT Software?
If you received a Form 1099-G reporting a state or local income tax refund, credit, or offset, you must determine whether the amount is taxable and then enter it correctly in the OLT (Online Taxes) software during your tax return preparation.
Steps to Add Form 1099-G in OLT Software
- Log in to your OLT tax return (Online).
- In the left menu (or tap the three dots in the top-right corner on mobile devices), click on Federal.
- Under the Income section, click on the Show more button near Unemployment Income.
- Click on Add or Edit next to Form 1099-G.
- Follow the on-screen instructions to input the details from your Form 1099-G.
What Information Is Reported on Form 1099-G?
Form 1099-G is used to report:
- State or local income tax refunds, credits, or offsets (Box 2)
- Unemployment compensation
- Reemployment Trade Adjustment Assistance (RTAA) payments
- Taxable grants
- Agricultural payments
- Payments on a Commodity Credit Corporation (CCC) loan
Note: If the refund, credit, or offset is for a tax year other than the current tax year, you must enter that year in Box 3 using the format “YYYY” (e.g., “2020”).
Determining Whether the Refund Is Taxable
The taxability of a state or local refund is based on the tax benefit rule:
- The refund is taxable only if you itemized deductions in the prior year and received a tax benefit from deducting state and local income taxes.
- If you claimed the standard deduction, the refund is generally not taxable.
Note: OLT may ask follow-up questions about your prior-year return to determine the taxable portion automatically.
Where to Report on the Tax Return (2025)
The taxable portion of the refund is reported on Schedule 1 (Form 1040), Part I, Line 1 (Taxable refunds of state and local income taxes).
This amount flows to Form 1040, Line 8 as part of additional income.
Important Box Information
- Box 2: Shows the amount of the state or local refund, credit, or offset.
- Box 3: Indicates the tax year to which the refund applies and should be entered in “YYYY” format if required.
Additional Reporting Considerations
- Interest on Refunds: If interest of $600 or more was paid on the refund, it is reported on Form 1099-INT and must be included as interest income.
Unemployment Compensation
- If included on Form 1099-G, it is reported separately on Schedule 1 (Form 1040), Line 7.
Source:
Form 1099-G Instructions
Disclaimer: Always verify information with official Federal or State Department of Revenue Forms and Instructions.