Filmmaker incentive credits, home improvement credits paid in low-income areas, and solar panel installation credits are some types of state programs which are generally reportable in box 2, to the extent a refund is paid by the state taxing agency or amount allowed as carryforward credit to the next tax year.ĭo not enter in box 2 payments that are not state income tax refunds, credits, or offsets. These include refunds or carryforward credits of overpayments of tax due to refundable state tax credits and incentive payments that are paid under an existing state tax law and administered by the state taxing agency. State or Local Income Tax Refunds, Credits, or OffsetsĮnter refunds, credits, or offsets of state or local income tax of $10 or more you made to recipients. See the Instructions for Forms 1099-MISC and 1099-NEC for more information.īox 2. You must also file Form 1099-G for each person from whom you have withheld any federal income tax (report in box 4) under the backup withholding rules regardless of the amount of the payment.Ĭertain amounts that are not reportable on Form 1099-G, such as compensation for services, prizes, and certain incentives, may be reportable on Form 1099-MISC, Miscellaneous Information, or Form 1099-NEC, Nonemployee Compensation. The officer or employee of the government unit having control of the payments, received or made, (or the designated officer or employee) must file Form 1099-G. You must also file this form if you received payments on a Commodity Credit Corporation (CCC) loan. Farmer says reimbursement for expenses like high-speed internet and home office equipment is a conversation to have with your employer.įor business owners who received Paycheck Protection Program loans, expenses paid out with that money are deductible.Īs for the stimulus checks, you don't have to pay taxes on that money.įinally, remember the date - Tax Day is Thursday, April 15, 2021.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 Reemployment Trade Adjustment Assistance (RTAA) payments taxable grants or agricultural payments. When it comes to people who started working remotely, you can’t claim a home office deduction unless you’re self-employed. “So, then you want to add that to your mortgage interest, real estate taxes and charity to see if you itemize or take the standard deduction.” Whatever medical expenses are over that, you can put in your itemized deductions,” said McQuinn. “They take your adjusted gross income times 7.5 percent and then you get a number. However, Danny McQuinn with Advanced Tax Services in Lexington says if you spent a lot of money out of pocket, it could be worth itemizing these deductions in your federal tax return. When it comes to state tax returns, medical expenses aren't deductible in Kentucky. For taxpayers who racked up medical bills, some medical expenses not covered by insurance can be deducted. It’s also good to know what items are deductible. If you didn't ask for it in advance, hopefully you saved some of that money to pay the tax on your unemployment.”įarmer says if you got extra income from odd jobs picked up during the year, like Uber or Door Dash delivery, that money will also be taxed. “The state of Kentucky will hold up to five percent and the federal government will hold withholding out, but you had to ask for it in advance. “Hopefully you had withholding from your unemployment,” said Farmer. Bill Farmer with HTI Tax Services in Lexington says if you're used to getting a W-2 form, you should now be on the lookout for a 1099-G form. If you received unemployment benefits, you will need to pay income taxes on that money. One of the biggest impacts of the pandemic was unemployment. It was a year that threw many curveballs that will change how people do their tax returns. (LEX 18) - Many people may never want to think about 2020 again, but with tax season approaching, we'll have to wait a little longer to say goodbye to the year completely.
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