What to do if you receive a 1099-G and didn’t apply for unemployment in 2020

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COLUMBUS (WCMH) — Jon Husted has received notice that he applied for unemployment assistance in 2020, one of some 1.7 million claims that the Ohio Department of Job and Family Services processed during the year.

The problem? Husted spent the entire year employed, as the lieutenant governor.

Husted is concerned over the alarming number of potential fraudulent unemployment claims filed in 2020, and as tax season opens, people will be required to report unemployment compensation as income. On Thursday, state Attorney General Dave Yost asked Congress in a letter to suspend efforts to collect taxes on those benefits and pause interest fees until the claims have been investigated.

The number of fraudulent claims will remain unknown until investigations are complete, but Husted said Thursday that 44,000 have been flagged.

“If they filed something in your name, they probably have information about your identity that may impact other aspects of life,” Husted said.

The Department of Job and Family Services is expected to send 1099-G forms to all 1.7 million that it has record of receiving unemployment benefits. Individuals have to report unemployment compensation when they file their income taxes.

“Construction workers, daycare providers, service industry workers — the backbone of this state — have worked hard throughout the pandemic and now the government is going to ask them to pay taxes on money they didn’t receive — it’s just not right.” Yost said.

In his letter, Yost asked Congress to consider:

  • Exclude the amount of unemployment compensation from the income for the taxpayer until a final determination is made by the state.
  • Once an amount is determined to be valid, to apply the amount to the proper tax year without penalties or interest.
  • If an amount certified to the IRS is determined to be invalid, for the state to indicate that to the IRS and assist the taxpayer in the correction process.

Husted said a person who believes that a fraudulent unemployment claim may have been filed in their name can go to unemploymenthelp.ohio.gov and click on the button that says “report identity theft.”

The fraud issues come as the state deals with updating unemployment software that it says is out of date. Husted and Gov. Mike DeWine said the state is in the process of moving to a cloud-based system but that it may take until the end of 2021 or even early 2022 before that work is completed.

“This tragedy of the COVID, and the ballooning of unemployment in Ohio, occurred during that attempt to get on the cloud,” DeWine said.

In addition, DeWine and Husted said the state is still adding staff to deal with the rise of unemployment claims that came about because of the coronavirus pandemic. The additional staff will help with the separate issue of claims not being processed as quickly as they should be.

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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