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Vermont Department of Taxes Issuing 1099-Gs for Economic Recovery Grants and Taxable Refunds

Shares guidance on how to ensure you keep the appropriate documents 

MONTPELIER, Vt.— Today the Vermont Department of Taxes mailed 1099-G forms to 21,000 taxpayers that detail potentially taxable state refunds or taxable grants. These forms are issued annually at the end of January to taxpayers who itemized deductions and received a Vermont income tax refund. This year, taxpayers who received an Economic Recovery Grant from the Department of Taxes should also expect to receive a 1099-G through the U.S. postal service. These forms should be used by taxpayers when filing their upcoming Federal and Vermont income tax returns. 

Due to the recent issuance of inaccurate 1099-Gs by the Vermont Department of Labor (VDOL) and their intention to recall those VDOL tax forms, the State recognizes there is potential for confusion. To assist Vermonters in making this determination, the Tax Department is offering the below guidance: 


How do I know my 1099-G from the Department of Taxes contains the right information?  

The Tax Department has a rigorous quality assurance process that tests all tax mailings for accuracy. These forms are processed separately with a different process than the one that caused the error in the Department of Labor forms.


Why would I receive a 1099-G in the mail from the Department of Taxes this year? 

  • You should expect to receive a 1099-G from the Department of Taxes if: 
  • You received a Vermont Income Tax refund last year and itemized deductions at the federal level.  
  • Your business received an Economic Recovery Grant or other taxable grant from the Department last year. 

Should I keep my 1099-G form or send it back? 

You should keep the Tax Department 1099-G. You should await further instruction from the VDOL on how to return the VDOL 1099-G forms.

Please visit the Vermont Department of Labor's website for more information about the 1099 Processing Issue and Improper Data Release Incident.


How can I tell if my 1099-G came from the Vermont Department of Taxes? 

There are several ways to confirm that the 1099-G form you received came from the Vermont Department of Taxes: 

  • The return address on the envelope you receive will say “Vermont Department of Taxes” 
  • The 1099-Gs will have information either in Box 2 “State or local income tax refunds,” or Box 6 “Taxable grants.”  
  • It will not have information in Box 1 “Unemployment compensation” 
  • The payer listed on the 1099-G is the Vermont Department of Taxes 

Example 1099-G from the Vermont Department of Taxes: 

Example 1099-G from the Vermont Department of Taxes

Return address from the envelope of a 1099-G from the Vermont Department of Taxes: 

Return address from the envelope of a 1099-G from the Vermont Department of Taxes