There's a chance you'll need to report the information listed on a Form 1099-G should you receive one from a government agency. Typically, 1099-G is used to report compensation from unemployment benefits, along with tax refunds issued by the state or local government.
If you receive compensation from unemployment, you are required to pay taxes on the income. You can find the total amount of money paid to you throughout the year in box 1 of the 1099-G.
Box 2 of the 1099-G will show any money paid to you through a refund, offset or credit of local or state taxes. Just because it's listed on the 1099-G doesn't mean you will be required to report the amount on your federal tax return. If you took the standard deduction previously, you can ignore Box 2. However, if you opted to take an itemized deduction in relation to payment of state or local taxes in prior years, you will need to report the amount.