An IRS Form 1099-G is issued when federal, state and local governments pay someone any of the following:
- Unemployment compensation
- State or local income tax refunds, credits or offsets
- Re-employment trade adjustment assistance payments
- Taxable grants
- Agricultural payments
Unemployment benefits and state and local income tax refunds are the most common reasons an employee would receive a 1099-G. By law, these forms are sent to employees by January 31.
If your employee did not file for unemployment benefits in last year and they receive a Form 1099-G, this could be a sign that the employee’s identity was used fraudulently. The employee should reach out to the State Workforce Agency to report potential fraud. Alerting Thomas & Company to these cases is also recommended so we can determine if we received a claim. We will notify the state of the fraud and monitor your account for additional activity.