Form 1099-G Decoder Calculator 2026 โ Unemployment and Refunds
Decode every box of Form 1099-G: calculate taxable unemployment compensation, apply the tax benefit rule to state refunds, RTAA payments, grants, and federal withholding. Box-by-box analysis.
Enter Form 1099-G Box Values
$
Always taxable federally; may be exempt by your state $
May be taxable โ depends on prior-year itemization $
$
$
$
Determines if Box 2 state refund is taxable
$
Amount of state income tax actually deducted (capped at $10K SALT) %
$0
Total Taxable Income (Federal)
$0
Box 2 Refund Taxable Amount
$0
Est. Federal Tax Owed
$0
Balance After Withholding
Box-by-Box Taxability Analysis
Understanding Form 1099-G
Form 1099-G reports certain government payments. The most common boxes are Box 1 (unemployment) and Box 2 (state tax refunds). Knowing which are taxable saves you from overpaying or underpaying.
Tax Benefit Rule (IRC 111) for Box 2
Box 2 is taxable only if you itemized the prior year AND received a tax benefit
Tax Benefit = Prior-year itemized deductions minus standard deduction
Taxable refund = lesser of: Box 2 amount OR tax benefit received
Tax Benefit = Prior-year itemized deductions minus standard deduction
Taxable refund = lesser of: Box 2 amount OR tax benefit received
2026 Standard Deductions (reference)
Single: $15,000 | MFS: $15,000 | MFJ: $30,000 | HOH: $22,500 | 65+ adds $2,000 (single) or $1,600 (MFJ each).
Sources and References (click to expand)
- IRS Form 1099-G Instructions โ Certain Government Payments
- IRC Section 111 โ Recovery of Tax Benefit Items (Tax Benefit Rule)
- IRS Publication 525 โ Taxable and Nontaxable Income
- Revenue Ruling 93-75 โ Tax Benefit Rule Applied to State Tax Refunds
- IRS Tax Topic 418 โ Unemployment Compensation
- IRS Tax Topic 154 โ Form W-2 and Form 1099-R (Related Reporting)
Extended
Tax Benefit Rule Calculator and Multi-1099-G Aggregator
Calculate exact taxable portion of state refund using prior-year deduction data, multi-1099-G aggregator, and SVG bar chart of income types.
Precise tax benefit rule calculation: enter prior-year itemized deductions to determine exact taxable portion of state refund.
$
$
$
$
$
Add multiple Form 1099-G forms (e.g., multiple states, multiple programs) to calculate aggregate federal taxable income.
$
| Source | Type | Amount | Taxable? | Taxable Amount |
|---|
No 1099-Gs added yet.
Breakdown of taxable income from your Form 1099-G.
Frequently Asked Questions
Is all unemployment compensation on Form 1099-G Box 1 taxable?
Yes, federal unemployment compensation reported in Box 1 of Form 1099-G is fully taxable for federal income tax purposes under IRC 85. It is treated as ordinary income and must be reported on Schedule 1 of Form 1040. However, state income tax treatment varies widely: some states (like California, New Jersey, and Virginia) exclude unemployment benefits from state taxable income, while others fully tax it. Any federal income tax withheld from unemployment appears in Box 4 and is a credit against your tax liability.
When is a state income tax refund in Box 2 taxable at the federal level?
Under the tax benefit rule (IRC 111), a state income tax refund is only taxable federally if you received a tax benefit from the original deduction. You received a benefit if you itemized deductions in the prior year and deducted state income taxes on Schedule A. If you took the standard deduction in the prior year, the refund is NOT taxable federally regardless of the amount. The taxable portion is limited to the lesser of: (a) the state refund received, or (b) the tax benefit you received from the deduction (i.e., how much your itemized deductions exceeded the standard deduction).
What is Box 3 on Form 1099-G and why is it different from Box 2?
Box 3 shows the tax year for which the state or local income tax refund applies โ it identifies which prior year return generated the refund. For example, a Box 2 refund received in 2026 might be for your 2025 state tax return. This matters because you need to look at whether you itemized on your 2025 federal return (the year shown in Box 3) to determine if the Box 2 amount is taxable in 2026. Box 3 is informational โ it helps you identify the correct prior-year return to evaluate.
What are RTAA payments shown in Box 5?
RTAA stands for Reemployment Trade Adjustment Assistance. Box 5 of Form 1099-G shows wage supplement payments made to workers who are reemployed at wages lower than their prior job due to trade-related job losses. Under the Trade Act of 2002, qualifying workers over age 50 could receive up to $12,000 in RTAA payments over two years. These payments are taxable as ordinary income. They are separate from regular trade adjustment assistance (TAA) training and other benefits, which may also appear on Form 1099-G in Box 6 (taxable grants).
What is the 2026 SALT deduction cap and how does it affect Form 1099-G taxability?
The Tax Cuts and Jobs Act capped the state and local tax (SALT) deduction at $10,000 ($5,000 for married filing separately) per year. This cap affects how much tax benefit you actually received from your state tax deduction, which in turn affects how much of a state tax refund is federally taxable. If your total SALT (state income taxes + property taxes) was $15,000 but you could only deduct $10,000 due to the cap, and your standard deduction was $16,000 for a single filer in 2025, you would have taken the standard deduction and the refund would be non-taxable.