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I received a Form 1099-G from the Wisconsin Department of Revenue. Why did I receive this form?
The Internal Revenue Service (IRS) requires government agencies to provide Form 1099-G when certain payments are made during the year because these payments may be taxable income for the recipients. The Wisconsin Department of Revenue must report on Form 1099-G any refund or overpayment credit amount issued during 2023 to anyone who claimed state income tax payments as an itemized deduction on the federal income tax return for the year to which the refund or credit applies.
The department's records show that we issued you a refund or overpayment credit during 2023. Therefore, you may be required to report the refund or credit as income on your 2023 federal income tax return.
Note: If you received more than one type of reportable payment, you may receive multiple Forms 1099-G from the Wisconsin Department of Revenue or other Wisconsin agencies. You may be required to report amounts from all Forms 1099-G that you receive as income on your 2023 federal income tax return.
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Why would I have to report my refund as income?
In computing itemized deductions on your federal income tax return, you are allowed to deduct state income taxes paid during the year. Most people deduct the amount of state income tax withheld, as shown on Form W-2, plus any Wisconsin estimated tax payments made during the year. Since this deduction reduces federal taxable income, if any part of the state tax deducted on the federal return is later refunded, that amount may have to be reported as taxable income for the year in which the refund is issued. Use the
State and Local Income Tax Refund Worksheet in the federal Form 1040 instructions to determine whether your Wisconsin tax refund must be reported as taxable income on your federal return.
Note: Since Wisconsin does not allow a deduction for state income taxes paid,
the refund should not be included in Wisconsin taxable income.
Example: Assume you deducted $5,000 in state income tax on your 2022 federal return, based on the Wisconsin income tax withheld from your wages. When you filed your Wisconsin return, you found that you were entitled to a refund of $500, which was issued on April 29, 2023. This means that you paid only $4,500 in state income taxes, rather than the $5,000 you claimed. Therefore, you must report the difference of $500 (the amount of your refund) as income on your federal return for 2023. You should not report the $500 as income on your 2023 Wisconsin return.
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I did show an overpayment on my 2022 Wisconsin return, but I had the money applied as a credit to 2023. Since I didn't receive a refund check, do I still have to report this amount as income?
A refund and a credit are different types of overpayments. The department must include any overpayment allowed on your 2022 return, whether issued as a refund or as a credit, on Form 1099-G. As a result, you are subject to the same federal reporting requirements as if you had received a refund check.
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I claimed a Wisconsin tax refund for 2022, but the Department of Revenue applied the money to a bill for another year. Do I still have to report this as income?
Wisconsin law requires the department to apply refunds or credits to certain outstanding bills. The application of funds doesn't change the fact that you claimed an overpayment for the year on your Wisconsin income tax return. Even though you didn't actually receive a check, you had an overpayment and you are subject to the same federal reporting requirements as if you had received a refund check.
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I received a refund check for $400, but a different amount was reported as income to the Internal Revenue Service (IRS) on Form 1099-G. Is this a mistake?
Your Form 1099-G explains how the amount of refund to be reported to the IRS was computed.
The following items may
increase the refund amount that you are required to report as income on your federal return:
- Donations you made on your tax return
- Sales and use tax due on out-of-state purchases
- Retirement plan and other penalties
- Amounts applied to next year's estimated tax
- Late filing fees
- Interest charged
- Penalties imposed
The following items may
decrease the refund amount that you are required to report as income on your federal return:
- Earned Income credit
- Homestead credit
- Farmland preservation credit; schedules FC and FC-A
- Interest earned and paid as part of the refund check
- Amounts paid on current returns
- Veterans property tax credit
Example 1: Assume that you paid $50 of sales and use tax on out-of-state purchases and donated $75 to the Endangered Resources Fund (ERF). You received a refund check for $400. The amount reportable as income on your federal return is $525. This would be explained on Form 1099-G as follows:
| The amount of refund in Box 1 was computed as follows: |
|---|
| Refund requested | $ 400 |
| Sales and Use Tax | + 50 |
| Endangered Resources Donation | + 75 |
| State Income Tax Refund | $ 525 |
Example 2: Assume that you received homestead credit of $228 and requested that $150 of your overpayment be applied to next year's estimated tax. You received a refund check for $400. The amount reportable as income on your federal return is $322. This would be explained on Form 1099-G as follows:
| The amount of refund in Box 1 was computed as follows: |
|---|
| Refund Requested | $ 400 |
| Homestead credit | - 228 |
| Applied Next Year's Estimated Tax | + 150 |
| State Income Tax Refund | $ 322 |
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I received a penalty of $500 for the early withdrawal of funds from a retirement plan. This resulted in an amount due of $300 on my 2022 income return. Why did I receive a 1099-G?
As explained in Answer 5 above, penalties on retirement plans may increase the amount to be reported as income. The Department of Revenue is required to report $200 of income to the Internal Revenue Service on Form 1099-G, which is computed as follows:
| Retirement Plan Penalty | $ 500 |
| Amount Paid | - 300 |
| State Income Tax Refund | $ 200 |
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I filed my 2022 return late. As a result of being charged a late filing fee of $50, I had to pay $5. Why did I receive a Form 1099-G?
As explained in Answer 5 above, late filing fees (LFF) may increase the amount to be reported as income. Amounts paid on current returns may decrease the refund amount. The Department of Revenue is required to report $45 of income to the Internal Revenue Service on Form 1099-G, which is computed as follows:
| Late Filing Fee | $ 50 |
| Amount Paid | - 5 |
| State Income Tax Refund | $ 45 |
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After I filed my 2022 Wisconsin return, I realized I had made a mistake. I filed an amended 2022 return in June 2023. How did you figure the amount to be reported to the Internal Revenue Service?
Example 1:
| Refund Requested | $ 500 |
| Refund Previously Requested | + 110 |
| State Income Tax Refund | $ 610 |
Example 2:
| Refund Requested | $ 500 |
| Amount Paid | - 110 |
| State Income Tax Refund | $ 390 |
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The Form 1099-G says the refund was issued for 2019. Why should I have to report that now?
Our records show that a refund for 2019 was issued on your account during 2023 and that you claimed itemized deductions for 2019. Since the refund was issued in 2023, the income would be reported on your 2023 federal income tax return. You may have received the refund as the result of filing an amended Wisconsin return for 2019 or of resolving a claim or dispute related to your 2019 return during 2023.
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Why did I receive a Form 1099-INT from the Department of Revenue?
The IRS requires the Department of Revenue to report on Form 1099-INT interest of $600 or more that was paid on refunds issued during 2023. You are required to report the interest as taxable income on your federal and Wisconsin income tax returns. Include the interest with the other interest income you report on your tax return.
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In 2023, I received $50 of interest from the Department of Revenue on a refund of 2019 taxes. I didn't receive a Form 1099-INT for this interest. Am I still required to report this interest as income?
Yes, the interest you received on a Wisconsin refund is taxable whether or not you received a Form 1099-INT from the department.
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Can I view my Form 1099-G online?
Yes. To view your
Form 1099-G online, you will need your last name, social security number (SSN)/individual tax identification number (ITIN) and zip code.
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Can I agree to go paperless and no longer receive a paper Form 1099-G?
Yes. To sign up to
go paperless, you will need your last name, social security number (SSN)/individual tax identification number (ITIN) and zip code.
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Will I receive an email from the Wisconsin Department of Revenue?
Yes. You will receive an email from the department if you provide your email address to the department and ask to receive notification when your Form 1099-G is available online.
Note: Your email address is confidential and will not be sold by the department.
This document provides statements or interpretations of the following laws and regulations enacted as of October 18, 2023: secs. 71.01, 71.93 and 71.935,
Wis. Stats., and 26 U.S. Code § 6050E.
Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.
Contact Us
MS 5-77
Wisconsin Department of Revenue
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2486
Fax: (608) 267-1030
Email:
DORIncome@wisconsin.gov