If a 1099-G from California showed up in your mail or inbox, it’s because a state agency paid you money last year that the IRS wants to know about. Only two California agencies issue this form: the Employment Development Department (EDD) sends one if it paid you unemployment insurance or Paid Family Leave benefits, and the Franchise Tax Board (FTB) sends one if you received a state income tax refund, credit, or offset of $10 or more.1Employment Development Department. Tax Information (Form 1099G)2State of California Franchise Tax Board. 1099 Guidance for Recipients The agency name on the form tells you which category you’re in, and each one is treated very differently at tax time.
You Collected Unemployment or Paid Family Leave
Unemployment is the single most common reason Californians get a 1099-G. The EDD reports every dollar of unemployment compensation it paid you during the calendar year and sends the same figure to the IRS.1Employment Development Department. Tax Information (Form 1099G) Federal law counts that money as gross income on your return.3Office of the Law Revision Counsel. 26 USC 85 – Unemployment Compensation There is no current exclusion; the temporary $10,200 exclusion that existed for 2020 has not been renewed.
Paid Family Leave (PFL) benefits, which replace wages while you care for a seriously ill family member or bond with a new child, land on a 1099-G too. For federal purposes they’re treated the same as unemployment compensation.4Employment Development Department. Tax Information Form 1099G The amount in Box 1 is the gross total before any voluntary withholding you set up, and it covers regular weekly benefits plus any federal extensions or supplemental payments.
Here’s the piece people miss: California does not tax unemployment or PFL benefits at the state level.5State of California Franchise Tax Board. Unemployment So if you collected $15,000, you owe California nothing on it, but the full $15,000 is federally taxable. Don’t confuse PFL with State Disability Insurance (SDI). SDI is generally not federally taxable and does not appear on a 1099-G, unless it was paid as a substitute for unemployment benefits.6California Tax Service Center. Special Circumstances If you received both SDI and PFL in the same year, only the PFL portion is on the form.
You Got a California State Tax Refund
If the form came from the FTB, it’s reporting the California income tax refund, credit, or offset you received last year. Getting the form does not automatically mean you owe federal tax on that refund. Whether you do depends on a single question: did you itemize deductions on your prior-year federal return?
If you took the standard deduction, the refund is not taxable, and you don’t put it on your federal return at all. You never wrote off those state taxes, so there’s nothing for the IRS to recapture.2State of California Franchise Tax Board. 1099 Guidance for Recipients Plenty of Californians who assumed otherwise have overpaid their federal taxes.
If you itemized and deducted your California state taxes on Schedule A, part or all of the refund may count as income under the tax benefit rule, because the IRS treats a refund of previously deducted taxes as a recovery of income you already wrote off. The amount you add back is capped by how much your itemized deductions actually reduced your tax.7Internal Revenue Service. Publication 525 (2025) – Taxable and Nontaxable Income The Schedule 1 instructions include a State and Local Income Tax Refund Worksheet to run the calculation.
You can get both forms in the same year. If you had unemployment from the EDD and a state refund from the FTB, two separate 1099-Gs will arrive, and each one feeds a different part of your return.
You Never Applied for Anything
A 1099-G you weren’t expecting, especially one from the EDD when you never filed for unemployment, is a red flag for identity theft. During the pandemic, fraudulent unemployment claims surged in California, and some of those bogus claims are still generating 1099-G forms years later. If this is you, someone likely filed a claim using your Social Security number.
Report the fraud to the EDD right away through the Ask EDD portal at askedd.edd.ca.gov under the Form 1099G category, or call 1-866-401-2849 Monday through Friday, 8 a.m. to 5 p.m. Once the EDD confirms the claim was fraudulent, it will remove the claim from your Social Security number and issue a corrected form.8EDD – CA.gov. What to Do If You Receive a Form 1099G Also file IRS Form 14039 (Identity Theft Affidavit) so the IRS knows the income wasn’t yours.9Internal Revenue Service. Reporting Identity Theft The IRS identity theft hotline is 800-908-4490.
If a 1099-G shows up addressed to someone who doesn’t live at your address, write “Return to Sender” on the envelope and put it back in the mail. No extra postage is needed.8EDD – CA.gov. What to Do If You Receive a Form 1099G
What to Do With the Form
Before anything else, check the numbers. For an EDD form, compare Box 1 to what you actually received in benefits during the year. For an FTB form, compare Box 2 to the refund amount on your prior-year California return. If something is off, contact the issuing agency before you file. Fixing it after the fact means an amended return.
When the numbers are right, the reporting is straightforward. Unemployment and PFL from Box 1 go on line 7 of Schedule 1 (Form 1040).10Internal Revenue Service. Unemployment Compensation Any federal tax withheld in Box 4 is reported with your other withholding on Form 1040 so it counts toward what you’ve already paid. A taxable state refund from Box 2 also goes on Schedule 1, with the amount determined by the Refund Worksheet in the instructions.7Internal Revenue Service. Publication 525 (2025) – Taxable and Nontaxable Income
To pull your EDD form online, log in to myEDD, select UI Online, go to Payments, and open Form 1099G. Digital copies stay available for five years.1Employment Development Department. Tax Information (Form 1099G) FTB forms are accessible through MyFTB, and the FTB mails paper copies starting in January.11State of California Franchise Tax Board. January 2026 Mailing of Forms 1099-G and 1099-INT If you opted into paperless delivery with the EDD, no paper copy will arrive and online is the only way to get it.
Keeping Next Year’s Form From Hurting
Unemployment and PFL payments arrive with no tax taken out by default, so the full federal bill waits for you at filing time. If you don’t withhold or make estimated payments, an underpayment penalty can land on top of the tax itself.12Internal Revenue Service. Publication 505 (2025) – Tax Withholding and Estimated Tax
Two ways to get ahead of it. Submit IRS Form W-4V to the EDD and elect voluntary federal withholding at a flat 10% of each payment; that’s the only percentage available for unemployment, and you can’t pick a different rate.13Internal Revenue Service. Form W-4V Voluntary Withholding Request Or make quarterly estimated payments to the IRS with Form 1040-ES, which is the better route if 10% won’t cover your bracket or you’ve already been collecting without withholding. Doing nothing is the option that produces a four-figure April surprise.