1099-G First time ever receiving one

[mrpaseo]

From what I am reading, I now pay taxes on last years tax return? Didn't I pay takes on this money last year before I paid it into takes?

So let's say I grossed $40,000. The state and fed take their cut, I get the rest. They took their cut based on my 40K earned.

I file taxes and find that I over paid, so some of that money is sent back as a refund.

Now this 1099-G is saying I have to pay taxes on it again?

Can someone clear this up for me?

[creditcardfree]

Did you itemize on your Federal Return? If so, you may have deducted the state income taxes that were withheld from your pay, therefore you did not pay taxes, on the portion that was returned to you. This is how I understand it, someone may be able to explain better.

[mrpaseo]

Did you itemize on your Federal Return? If so, you may have deducted the state income taxes that were withheld from your pay, therefore you did not pay taxes, on the portion that was returned to you. This is how I understand it, someone may be able to explain better.

I have never itemized. Ever.

[Petunia 100]

Yes, you have to claim it as income to the extent you received a tax benefit.

Did you itemize? If no, you don't claim it.

If you itemized, did you deduct state income taxes or sales tax? If you deducted sales tax, you don't claim it.

If you itemized and deducted state income taxes, how much did your itemized deductions exceed the standard deduction? If less than the amount of your refund, that part is taxable. If more than the amount of your refund, the whole thing is taxable.


If not for this provision, you could theoretically have your entire pay (minus payroll taxes) withheld for state income taxes, thereby escaping federal income tax altogether.

[Petunia 100]

I have never itemized. Ever.

Then it's not taxable income. Just file it away with your other 2013 tax documents.

[mrpaseo]

Thank you all.

[creditcardfree]

You are welcome! Glad you don't have to worry about it.