Tax Forms For Unemployment Benefits Sent To Georgians Who Did Not Lose Jobs
Updated at 3:55 p.m. Tuesday
If you got unemployment payments last year, you should have gotten a Form 1099-G for your IRS tax filings because it is taxable income. But a lot of Georgians are getting these forms even though they never filed for unemployment, and state officials blame fraud and pandemic urgency for the faulty paperwork.
“We encourage individuals to review this documentation carefully and report any discrepancies on the applications available on our website,” Georgia Labor Commissioner Mark Butler urged.
His department processed an all-time-record of over 4.3 million unemployment claims during the pandemic, and not all those were legitimate. Identity fraud is a major issue, and the department has heard from about 1,500 people who received a 1099-G tax form but never filed for unemployment with the Georgia labor department in 2020.
The department spokeswoman, Kersha Cartwright, says the agency became aware of about 700 such cases just two weeks ago.
Claims were filed in peoples’ names, using their social security numbers, but some “are not going to know until they get at 1099-G in the mail,” Cartwright said.
Cartwright wants victims to report possible fraud to the department through its website, but that’s not all.
“There are a couple of other steps they need to take. They need to inform the IRS. They need to make sure they inform their credit card companies,” she said.
This type of fraud around unemployment benefits happened around the country as states tried to implement the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, quickly. A report issued in November by the inspector general of the U.S. Department of Labor estimated that 10%, or $36 billion, of the CARES Act money for unemployment could have been paid improperly “with a significant portion attributable to fraud.”
“There is not a great solution to this kind of fraud, and, of course, we haven’t seen fraud on this level in a really long time,” Cartwright said.
We also haven’t had a pandemic in a really long time, with sudden high unemployment that forced labor officials to find efficiencies. One of them, Cartwright said, was meant to speed things up.
“So what we did in order to get benefits out faster was to ask employers to file on behalf of their employees,” she said.
Some employers wrongly filed for everyone on their payroll, even their freelancers or part-time workers who may have had other full-time jobs and were not eligible for unemployment.
“Maybe you were working part-time and only once, and they went in and filed on your behalf without your knowledge,” Cartwright said.
In these cases, people may have gotten a debit card in the mail that they ignored or cut up, but now received 1099-G forms for the money they never claimed. To avoid paying taxes on unclaimed income, the Georgia Department of Labor has set up this reporting tool on its website.
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