In January of each year, the Iowa Department of Revenue mails to certain taxpayers federal forms 1099-G and 1099-INT. The Department is required by federal law to send these forms to taxpayers who meet the reporting criteria. In addition to providing them to taxpayers, the information on the 1099s is furnished to the Internal Revenue Service.
The 1099s are not bills or notices of an additional refund. They simply provide information about refunds which have already been issued.
A 1099-INT (Interest Income) is mailed to taxpayers who received at least $10 in interest on their Iowa refund.
Things to remember about a 1099-INT:
- The Tax Year shown on the form is the tax year for which you received the interest
- The Taxable Interest shown is the amount of interest you received on Iowa tax refunds issued for that Tax Year
- If you received interest for more than one tax year, you will receive a 1099-INT for each year
- The interest must be reported as income on BOTH your federal AND Iowa income tax returns
The Department sends a 1099-G (Certain Government Payments) to taxpayers who received an Iowa income tax refund during the year AND who filed a Schedule A (Itemized Deductions) with their federal income tax return in the tax year for which the refund was issued. Because a deduction for Iowa taxes paid would normally have been taken on the federal Schedule A, any refund of those Iowa taxes must be included as income on the federal return in the year the refund was received. A 1099-G is not mailed to those who received an Iowa refund, but didn’t itemize for federal purposes that year, because they would not have taken a deduction for Iowa taxes on their federal return.
Example 1: Jill filed 2013 federal and Iowa returns. Jill itemized her deductions on the federal return. On the federal Schedule A, she claimed a deduction for $2,000 of Iowa tax withheld from her paycheck during 2013. On April 25, 2014, Jill received a refund of $500 from her 2013 Iowa return. In January of 2015, the Iowa Department of Revenue sends Jill a 1099-G showing a reportable refund of $500. Jill must report the $500 as income on her 2014 federal return.
Example 2: Jack filed 2013 federal and Iowa returns. Jack took the standard deduction on the federal return and did not complete a federal Schedule A. On May 10, 2014, Jack received a refund of $200 from his 2013 Iowa return. In January of 2015, the Iowa Department of Revenue does not send Jack a 1099-G, because he didn’t itemize on his 2013 federal return. Jack does not need to report the $200 as income on his 2014 federal return.
Things to remember about a 1099-G:
- The Tax Year shown on the form is the tax year for which you received the refund
- The Reportable Refund shown is the amount of an Iowa income tax refund you received
- If you received a refund for more than one tax year, you will receive a 1099-G for each year
- If you claimed these Iowa income taxes as an itemized deduction on a previous federal return, this refund amount must be reported as income on your federal return
- Do not report the refund as income on your Iowa return
- The amount shown on the 1099-G is usually the same as the amount of your state refund check, but can sometimes be different
- If the amount on the 1099-G is less than your refund check, these are some of the possible reasons:
- Your refund included interest
- You claimed an Iowa Earned Income Tax Credit
- You claimed a Child and Dependent Care Credit OR Early Childhood Development Credit
- You claimed a Motor Fuel Credit
- If the amount on the 1099-G is more than your refund check, these are some of the possible reasons:
- You contributed to any Iowa checkoff(s), such as the Chickadee Checkoff or State Fair Checkoff
- You applied all or part of your refund to estimated tax payments
- Part or all of your refund was applied to delinquent federal or Iowa taxes, or debts owed to county or state agencies, such as Child Support or College Aid loans
- You owed an Iowa underpayment of estimated tax penalty calculated on the IA 2210, IA 2210F, or IA 2210S
- If an amended Iowa return for the same tax year was later filed showing additional tax due, the full amount of the original refund will appear on the 1099-G. Any tax paid with the amended return can be taken as an itemized deduction on the federal Schedule A.