Hold up on doing your taxes; Arizona tax form 1099-G is flawed

Here is one of the incorrect 1090-G forms sent out by the Department of Revenue which incorrectly lists a taxpayer's 2014 state tax refund instead of the 2015 amount. The agency has vowed to send corrected forms, though no date has been set.

Here is one of the incorrect 1090-G forms sent out by the Department of Revenue which incorrectly lists a taxpayer's 2014 state tax refund instead of the 2015 amount. The agency has vowed to send corrected forms, though no date has been set.

PHOENIX -- So you've got all your W-2s and 1099s and you're ready to start doing your taxes.

But if one of those forms is about your state income tax refund, here's a piece of advice: Don't.

It turns out that the Department of Revenue put the wrong numbers on those 1099-G forms, the ones that are supposed to tell you how much of a refund you got in 2016 on your 2015 taxes. As it turns out, the numbers on the form are from 2014.

And the agency's problem becomes your problem if you file your returns with using the wrong numbers.

It means that what you list on your federal tax return as your refund from the state won't match what the state is telling the feds. And that's exactly the kind of thing that is likely to kick out your return for the kind of special scrutiny -- or a letter in your mailbox from the IRS -- that sends shivers down the spine of taxpayers.

Don't take it personally. Out of about 3 million Arizona individual tax returns, about 580,000 generated refunds last year.

And the 1099-Gs sent to each and every one of those taxpayers is wrong.

Department spokesman Ed Greenberg said Tuesday his agency, which learned of the problem only after calls from Capitol Media Services and others, is working to send out corrected forms. But he had no answer when that will happen.

So what went wrong? Greenberg said no one currently knows.

"That's part of the root-cause analysis that was launched,'' he said. "We're going to pinpoint how this error occurred and prevent it from happening in the future.''

But he said the more immediate goal is to get corrected 1099-G forms out so that taxpayers have the correct information to put on their federal tax returns.

All that comes at a cost -- and not just in postage for 580,000 new forms. There's also the staff time to make the fixes and even having to reprint all of them.

Greenberg said, however, he has no idea at this point of what the price tag will be.

In the meantime, taxpayers who got the incorrect 1099-Gs have two options.

One, obviously, is to wait for the state to get around to mailing corrected forms.

But Greenberg said those who are in a rush to file their returns can simply pull their 2015 state tax forms, locate the refund they received, and use that number on this year's federal 1040 forms. Unlike W-2s, there's no requirement to attach an actual 1099.

On Twitter: @azcapmedia

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