Instructions for Form 1099-G |
2003 Tax Year |
Instructions for Form 1099-G - Main Contents
This is archived information that pertains only to the 2003 Tax Year. If you are looking for information for the current tax year, go to the Tax Prep Help Area.
The backup withholding rate has decreased to 28%.
In addition to these specific instructions, you should also use the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G.
Those general instructions include information about:
- Backup withholding
- Magnetic media and electronic reporting requirements
- Penalties
- Who must file (nominee/middleman)
- When and where to file
- Taxpayer identification numbers
- Statements to recipients
- Corrected and void returns
- Other general topics
You can get the general instructions from the IRS website at www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
Specific Instructions for Form 1099-G
File Form 1099-G, Certain Government Payments, if as a unit of a Federal, state, or local government, you made payments of unemployment
compensation; state or local income tax refunds, credits, or offsets; taxable grants; or agricultural payments. The officer
or employee of the
government unit having control of the payments (or the designated officer or employee) must file Form 1099-G.
If you are required to file Form 1099-G, you must provide a statement to the recipient. Furnish a copy of Form 1099-G or an
acceptable substitute
statement to each recipient, except as explained below under Box 2. State or Local Income Tax Refunds, Credits, or Offsets. Also, see part
H in the 2004 General Instructions for Forms 1099, 1098, 5498, and W-2G.
Box 1. Unemployment Compensation
Enter payments of $10 or more in unemployment compensation including Railroad Retirement Board payments for unemployment.
Enter the total amount
before any income tax was withheld. If you withhold Federal income tax at the request of the recipient, enter it in box 4.
Box 2. State or Local Income Tax Refunds, Credits, or Offsets
Enter refunds, credits, or offsets of state or local income tax of $10 or more you made to recipients. If recipients deducted
the tax paid to a
state or local government on their Federal income tax returns, any refunds, credits, or offsets may be taxable to them. You
are not required to
furnish a copy of Form 1099-G or a substitute statement to the recipient if you can determine that the recipient did not claim
itemized deductions on
the recipient's Federal income tax return for the tax year giving rise to the refund, credit, or offset. However, you must
file Form 1099-G with the
IRS in all cases.
A tax on dividends, a tax on net gains from the sale or exchange of a capital asset, and a tax on the net taxable income of
an unincorporated
business are taxes on gain or profit rather than on gross receipts. Therefore, they are income taxes, and any refund, credit,
or offset of $10 or more
of these taxes is reportable on Form 1099-G. In the case of the dividends tax and the capital gains tax, if you determine
that the recipient did not
itemize deductions, as explained above, you are not required to furnish a Form 1099-G or substitute statement to the recipient.
However, in the case
of the tax on unincorporated businesses, you must furnish a Form 1099-G or substitute statement to the recipient in all cases,
as this is a tax that
applies exclusively to income from a trade or business. See Box 8. Trade or Business Income (Checkbox), below and Rev. Rul. 86-140, 1986-2
C.B. 195.
If you pay interest of $600 or more on the refund, you must file Form 1099-INT, Interest Income, and furnish a statement to
the recipient. For interest payments of less than $600, you may choose to enter the amount with an appropriate designation
such as “Interest
Income” in the blank box on Copy B of the Form 1099-G.
Box 3. Box 2 Amount Is For Tax Year
No entry is required in box 3 if the refund, credit, or offset is for the 2003 tax year. If it is for any other tax year,
enter the year
for which the refund, credit, or offset was made. Also, if the refunds, credits, or offsets are for more than 1 tax year,
report the amount for
each year on a separate Form 1099-G. Use the format “YYYY” to make the entry in this box. For example, enter 2002, not '02.
Box 4. Federal Income Tax Withheld
Backup withholding.
Enter backup withholding at a 28% rate on payments required to be reported in box 6 or 7. For example, if a recipient
does not furnish its taxpayer
identification number (TIN) to you, you must backup withhold.
Voluntary withholding.
Enter any voluntary Federal withholding on unemployment compensation, Commodity Credit Corporation loans, and certain
crop disaster payments. If
you withheld state income tax, you may label it and report it on the statement to the recipient. However, you are not required
to report state
withholding to the IRS.
Make no entry in this box.
Enter any amount of a taxable grant administered by a Federal, state, or local program to provide subsidized energy financing
or grants for
projects designed to conserve or produce energy, but only with respect to section 38 property or a dwelling unit located in
the United States. Also,
enter any amount of a taxable grant administered by an Indian tribal government.
Report amounts of other taxable grants of $600 or more. A Federal grant is ordinarily taxable unless stated otherwise in the
legislation
authorizing the grant. Do not report scholarship or fellowship grants. See Scholarships in the Instructions for Form
1099-MISC.
Box 7. Agriculture Payments
Enter USDA agricultural subsidy payments made during the year. If you are a nominee that received subsidy payments for another
person, file Form
1099-G to report the actual owner of the payments, and report the amount of the payments in box 7.
Box 8. Trade or Business Income (Checkbox)
If the amount in box 2 is a refund, credit, or offset attributable to an income tax that applies exclusively to income from
a trade or business and
is not a tax of general application, enter an “X” in this box.
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