GDOL Tax Info If You Received Unemployment Benefits in 2020

The Georgia Department of Labor has processed over 4.3 million unemployment claims in the past year leading to the issuance of almost 1.5 million 1099-G tax forms reflecting amounts issued in unemployment benefits during 2020. These forms will include any state and federal deductions if claimants selected the withholding option. However, some individuals may receive a 1099-G tax form who did not file an unemployment insurance claim this year or an employer filed a claim on their behalf without their knowledge.  Labor departments across the United States are addressing these 1099-G tax form issues and the GDOL is issuing specific steps for these individuals.  

“UI benefits are taxable income and we issue 1099-Gs per federal law to report payments and all taxes withheld during each tax year,” said Commissioner of Labor Mark Butler. “We encourage individuals to review this documentation carefully and report any discrepancies on the applications available on our website.” 

Individuals that did not file a claim or employer did not file a claim

If an individual receives a 1099-G tax form and did not file a claim themselves in 2020 or an employer did not file a claim on their behalf, the potential fraud will need to be reported to the GDOL. The agency will investigate the report of identity theft, make any necessary adjustments to the individual’s 1099-G, if applicable, and resubmit the amended 1099-G tax form to the Internal Revenue Service.  Individuals should report the potential fraud at “Report UI Fraud and Abuse” at https://www.dol.state.ga.us/public/uiben/fraud/reportType.  Select “Report 1099 ID Theft” at the bottom of the form and follow instructions.

 
The GDOL also encourages victims of identity theft to:

1. File a police report with your local police department. Obtain a copy of the report that you can provide to creditors and credit agencies.
2. Change passwords on your email, banking, and other personal accounts.
3. Make a list of credit card companies, banks, and other financial institutions where you do business. Tell them you are a victim of identity theft and ask them to put a fraud alert on your account.
4. Get a copy of your credit report and dispute any fraudulent transactions. You can request credit reports online from the 3 major credit reporting agencies
   1. Equifax: 800-349-9960 or freeze your credit online
   2. Experian: 888-397-3742 or freeze your credit online
   3. TransUnion: 888-909-8872 or freeze your credit online
5. Place a fraud alert on your credit file. You can do this by contacting just one of the credit agencies to add an alert with all three agencies.
6. Report identity theft to the Federal Trade Commission (FTC). The FTC has a wealth of information for identity theft victims, including assistance with a recovery plan. https://www.identitytheft.gov 877-438-4338
7. If you suspect that someone is using your SSN for work purposes, contact the Social Security Administration at 800-772-1213 to report the problem. They will review your earnings with you to ensure they are correct.
8. Consider filing a complaint with the US Department of Justice National Center for Disaster Fraud (NCDF) https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form
9. Let the IRS know you are a victim of identity theft by filing the File Form 14039, Department of the Treasury – Internal Revenue Service Identity Theft Affidavit, with the IRS. More information can be found here: https://www.irs.gov/individuals/how-irs-id-theft-victim-assistance-works

Individuals whose employers filed a claim on their behalf without his/her knowledge

If an individual receives a 1099-G tax form from a claim filed by an employer without his/her knowledge, they will still receive a 1099G reflecting these payments.  In accordance with IRS rules, an individual that receives UI benefits and does not use them will still receive a 1099-G, but can show the money as being paid back.  

Employers are asked to file employer filed (partial) claims online on behalf of their full and part-time employees whenever it is necessary to temporarily reduce work hours or there is no work available due to COVID-19. Filing employer filed claims results in employees receiving unemployment insurance (UI) benefit payments faster. Employers are asked to report the employee’s gross wages—amount of pay before deductions— for any work they performed during the week. If an employee is employed with another company, this income should also be reported.  When this income is not reported, it could result in an overpayment for the employee. Employers are asked to report any vacation pay, holiday pay, and any additional income employees are receiving to the GDOL, except Social Security benefits, jury duty income, and pay for weekend military reserve duty. 

If an individual received any correspondence from the GDOL on an employer filed claim, we encourage that individual to discuss any additional wages with the company that was filing on their behalf.  Any UI benefits that were received by the employee that they were not eligible for (either by direct deposit or on a Way2Go card) should be returned to the GDOL.  If an individual returns the benefits to the GDOL, they can report those returned funds on their IRS tax form thereby deducting the amount from that reported in the 1099G form.  If UI benefits are repaid or returned to the GDOL, the IRS instructs a claimant to subtract the amount repaid to the GDOL from the total amount received in UI benefits and enter the difference on Schedule 1 (Form 1040), line 7. On the dotted line next to the entry, enter “Repaid” and the amount repaid. 

If an employer filed claim was filed on behalf of an employee and he/she never received the funds to return them to the GDOL or destroyed the Way2Go card, the individual should submit a request to return the funds to the GDOL by submitting an application found on the GDOL website at https://www.dol.state.ga.us/public/uiben/claimantservices/debitCardReturn

After the request is submitted and processed, the individual will receive a document that will serve as an acknowledgement from the GDOL that he/she has requested to return or repay the UI benefits issued in tax year 2020.  This document can be used for tax records as proof of repayment.  

For further information or assistance on tax returns, individuals should speak with a tax professional who may assist in preparing state or federal income tax returns. Please continue to visit our website at https://dol.georgia.gov/blog/form-1099-g-tax-information for up-to-date information on 1099Gs.