1099-G and Fraud

Over the past two years, there have been many cases of fraudulent claims for unemployment benefits where identity thieves used stolen names and Social Security numbers to submit claims for unemployment benefits.

If a taxpayer had his or her identity stolen and used to claim fraudulent unemployment benefits, the New York State Department of Labor may issue a Form 1099-G, Certain Government Payments, for the 2021 tax year that reports benefits in the name and Social Security number of the taxpayer, even though the taxpayer never actually claimed or received such benefits.  The Department of Labor does not mail these forms, and the taxpayer never actually set up an online account (since the taxpayer actually never applied for the benefits), so there is typically no way for the taxpayer to obtain the incorrect Form 1099-G.

If a Form 1099-G reports the fraudulent benefits in the name and Social Security number of the taxpayer, the IRS will expect to see such benefits reported on the taxpayer’s income tax return, so it is important to request a corrected Form 1099-G, since the taxpayer never received such benefits.

The Department of Labor has an application that a taxpayer can use to request that a 2021 Form 1099-G be corrected to reflect that no benefits are actually reportable to the taxpayer.  The form is available here.  Taxpayers who were affected by fraud can check the box that indicates that they did not file for any benefits during 2021.

If you have not already enrolled or taken our seminar, our last seminar of the season is on January 13, 2022.  Enroll now so you’ll be fully prepared for this tax season!  If you are not already registered, register here.