A CT 1099-G form reports money a Connecticut state agency paid you during the year: either unemployment compensation from the Connecticut Department of Labor (CTDOL) or a state income tax refund from the Department of Revenue Services (DRS). The IRS receives its own copy, so the amount has to show up on your return in the right place, even when it isn’t ultimately taxable.
Which Agency Sent It, and What Box Is Filled In
Two different Connecticut agencies issue the 1099-G, and each fills in different boxes. CTDOL reports unemployment payments in Box 1. DRS reports state income tax refunds in Box 2. If you had both kinds of income, you’ll get two separate forms.1Internal Revenue Service. Instructions for Form 1099-G
Box 1 covers regular state unemployment insurance, Extended Benefits, and payments from the Connecticut Paid Family and Medical Leave program (administered through Continental American Insurance Company, AFLAC Group), all grouped as unemployment compensation under federal reporting rules.2CT.gov. 1099-G Tax Form Explained Box 4 shows federal tax withheld from those payments; Box 11 shows Connecticut tax withheld.1Internal Revenue Service. Instructions for Form 1099-G
Box 2 is your prior-year Connecticut refund. The figure includes any cash refund you received, any portion you applied to this year’s estimated taxes, and any amount the state kept to offset another debt.3Connecticut State Department of Revenue Services. Form 1099-G, Certain Government Payments
Reporting Unemployment Compensation (Box 1)
Box 1 is fully taxable for federal purposes. Enter the amount on line 7 of Schedule 1 (Form 1040), and it flows into your adjusted gross income.4Internal Revenue Service. Topic No. 418, Unemployment Compensation If Box 4 shows federal withholding, claim it on line 25b of Form 1040.5Internal Revenue Service. Unemployment Compensation
Unemployment stays taxable for Connecticut too. The state return starts from your federal AGI, and there is no general subtraction for unemployment on Form CT-1040.
One thing catches people off guard: unemployment doesn’t count as earned income for the Earned Income Tax Credit.6Internal Revenue Service. Earned Income and Earned Income Tax Credit (EITC) Tables If you lost your job mid-year, benefits will raise your AGI (shrinking the credit) without boosting the earned income side that qualifies you.
Reporting a State Tax Refund (Box 2)
Box 2 is only taxable federally if you itemized last year and actually deducted your Connecticut income taxes. This is the tax benefit rule: a refund is income only to the extent the original deduction cut your tax.7Office of the Law Revision Counsel. 26 U.S. Code 111 – Recovery of Tax Benefit Items If you took the standard deduction last year, ignore Box 2 on the federal return.
Even itemizers often owe tax on less than the full refund. The federal cap on state and local tax deductions is $10,000 ($5,000 if married filing separately). If your state and local taxes exceeded the cap, you only benefited from the capped portion, and the refund attributable to taxes above the cap isn’t taxable now. The Schedule 1 instructions include a worksheet for the calculation. If it shows zero benefit, none of the refund is taxable, no matter how large it was.
When Box 2 is taxable federally, put it on line 1 of Schedule 1. Then subtract it back out on the Connecticut side: enter the same taxable refund amount on line 42 of CT-1040 Schedule 1.8CT.gov. Form CT-1040 Connecticut Resident Income Tax Return Instructions Connecticut never allowed a deduction for the state income tax in the first place, so the subtraction prevents double taxation.9Connecticut Department of Revenue Services. Form CT-1040 Connecticut Resident Income Tax Return
Finding Your Form Online
Agencies must make the 1099-G available by January 31 of the following year.10Internal Revenue Service. Requirements for Furnishing Form 1099-G Electronically CTDOL also mails paper copies in early January.2CT.gov. 1099-G Tax Form Explained
For unemployment (Box 1), log into your ReEmployCT account at the CTDOL portal, open “Inquire,” and select “View Correspondence.”11Connecticut Department of Labor. Welcome to ReEmployCT
For a state refund (Box 2), log into the DRS myconneCT portal and choose “What’s My 1099-G Amount?” from the Individual panel on the welcome page, or go to “More” on the Summary page and then “Letters.”3Connecticut State Department of Revenue Services. Form 1099-G, Certain Government Payments
If a figure looks wrong, go to the agency that issued the form: CTDOL for Box 1, DRS for Box 2. If a correction won’t arrive before your filing deadline, file with the amount you actually received, keep a copy of your correction request, and be ready to show it later.
If the Form Shows Benefits You Never Collected
A 1099-G reporting unemployment you didn’t receive usually means someone filed a fraudulent claim in your name. Don’t ignore it. The IRS will expect tax on that income unless you clear the record.
Report the fraud to the CTDOL Integrity Unit using its online ID Theft Report Form, or call (860) 263-6000 during business hours.12CT.gov. Integrity Once CTDOL confirms fraud, it issues a corrected 1099-G showing zero benefits.
On the federal side, file IRS Form 14039 (Identity Theft Affidavit) online at irs.gov, by fax to 855-807-5720, or by mail to the IRS in Fresno, California.13Internal Revenue Service. Identity Theft Affidavit, Form 14039 Don’t put the fraudulent income on your return. Report only what you actually received, and attach a statement explaining the situation if the corrected form hasn’t arrived.
If You Had to Repay Benefits
Repayments to CTDOL change your tax picture, and the handling depends on timing.
Repay in the same year you got the benefits, and CTDOL should reduce the Box 1 figure to the net amount. The 2025 Schedule 1 includes a checkbox on line 7 for repayments of unemployment overpayments.14Internal Revenue Service. Schedule 1 (Form 1040)
Repayments that cross tax years work differently. If you reported the benefits as income in a prior year and repay more than $3,000, you can either deduct the repayment on Schedule A (line 16) or take a credit on Schedule 3 (line 13b) for the tax you overpaid in the earlier year. Run the numbers both ways and use the better result.15Internal Revenue Service. Publication 525, Taxable and Nontaxable Income For repayments of $3,000 or less, only the itemized deduction is available, and it helps only if you itemize.
Setting Up Withholding So Next Year Isn’t Worse
Unemployment arrives without any tax taken out unless you ask. File Form W-4V (Voluntary Withholding Request) with CTDOL to have federal tax withheld. The only rate option for unemployment is a flat 10%.16Internal Revenue Service. Form W-4V Voluntary Withholding Request Send the form to CTDOL, not the IRS.
Ten percent may not cover you if unemployment is your main income and you also owe Connecticut tax. Quarterly estimated payments are the safer path. The IRS generally won’t penalize you if you pay at least 90% of this year’s tax or 100% of last year’s through withholding and estimates combined.17Internal Revenue Service. Estimated Taxes Connecticut’s safe harbors largely mirror the federal rules.
What Happens If You Leave It Off
The IRS matches every 1099-G against the return. If the income isn’t there, expect a notice proposing additional tax, plus penalties and interest.
The accuracy-related penalty for a substantial understatement is 20% of the underpaid tax, and a substantial understatement means underreporting by 10% of the correct tax or $5,000, whichever is greater.18Internal Revenue Service. Accuracy-Related Penalty Interest also accrues on the unpaid balance from the original due date.19Internal Revenue Service. Quarterly Interest Rates
If you honestly disagree with the amount on a 1099-G, don’t just drop it from your return. File with the figure you believe is correct, document why it differs, and pursue a corrected form from the issuing agency. The IRS treats a good-faith return with an explanation very differently from income that simply isn’t there.