The Arizona Department of Revenue announced last week that they made a mistake. It mailed incorrect 1099-G statements of refunds to about 580,000 taxpayers in January 2017. The 1099-G forms for 2016 are supposed to show refunds taxpayers received after filing their 2015 tax return. Instead, the department sent out forms showing the 2014 refund amount.
Taxpayers use the forms to fill out their state and federal tax returns. Using the incorrect information could cause a taxpayer's return to be flagged by the IRS.
Any taxpayer who received an incorrect 1099-G from the Arizona Department of Revenue in January should destroy the form. The correct form has the word CORRECTED located in the upper right side of the form in red.
This matter does not impact anyone who did not itemize deductions on the federal return and did not receive an Arizona state income tax refund in 2016 for tax year 2015 or earlier.
Corrected 1099-G forms have been printed and will be mailed out on Monday, February 6th.
The additional cost to reprint and mail the corrected tax forms is estimated at nearly $300,000.