Form 1099G is an information return - not a tax bill or a refund. If you received a Maryland income tax refund last year, we're required by federal law to send Form 1099G to you to report that the state refund may have to be reported as income on your federal tax return.
When you itemize deductions on your federal return, you are allowed to deduct state income taxes or sales taxes that you paid during the year. This deduction reduces your federal taxable income. If any part of the state income taxes you deducted on your federal return is later refunded to you, that amount must be reported as taxable income on your federal return for the year in which the refund is issued. See a Form 1099G example.
Form 1099G reflects all Maryland refunds
Form 1099G reflects all Maryland refunds that were credited to you for last year, including refunds from amended returns for prior years. The form will also show if any or all of your refund was applied to the following:
- A donation to the Chesapeake Bay and Endangered Species Trust Fund
- A donation to the Developmental Disabilities Waiting List Equity Fund
- A donation to the Maryland Cancer Fund
- A child support debt
- A delinquent tax liability or another bill
Even if your refund was applied to offset a bill or make a donation, federal law maintains that you received the benefit of the refund and you must report it as income.
Keep 1099G with records
You don't need to attach the 1099G form to your federal or state income tax returns. Just keep it for your records. To maintain confidentiality, your Social Security number is not included on your Form 1099G.
If you use a professional tax preparer, please give the form to your preparer, along with your W-2s and other tax information. If your name and/or address on the form is incorrect, contact us.