This afternoon, California’s Franchise Tax Board (FTB, the state income tax agency) announced that taxpayers may have received incorrect 2024 Form 1099-G’s.
The Form 1099-Gs sent by FTB for tax year 2024 may contain incorrect amounts when an estimate transfer from the previous year has occurred. [Taxpayers and] Tax professionals should verify that the amounts reported on the Form 1099-Gs are correct by comparing the amounts with the previous year tax return.
The FTB will be sending corrected 1099-G’s. For now, taxpayers should review the 1099-G’s carefully and use the correct amount of the tax refund, not what is on the 1099-G. Tax refunds can (but are not necessarily) taxable income the following year for federal income tax if the taxpayer itemized in the previous year and deducted income taxes (not sales tax).