JANUARY 28, 2021 - WASHINGTON
— The Internal Revenue Service today
urged taxpayers who receive Forms 1099-G for unemployment benefits they did not
actually get because of identity theft to contact their appropriate state
agency for a corrected form.
States issue Forms
1099-G to the taxpayer and to the IRS to report what taxable income, such as
refunds or unemployment benefits, were issued by state agencies.
millions of taxpayers were impacted by the COVID-19 pandemic through job loss
or reduced work hours. Some taxpayers who faced unemployment or reduced work
hours applied for and received unemployment compensation from their state.
Under federal law, unemployment benefits are taxable income.
also took advantage of the pandemic by filing fraudulent claims for
unemployment compensation using stolen personal information of individuals who
had not filed claims. Payments made as a result of these fraudulent claims went
to the identity thieves, and the individuals whose names and personal
information were taken did not receive any of the payments.
receive an incorrect Form 1099-G for unemployment benefits they did not receive
should contact the issuing state agency to request a revised Form 1099-G
showing they did not receive these benefits. Taxpayers who are unable to obtain
a timely, corrected form from states should still file an accurate tax return,
reporting only the income they received. A corrected Form 1099-G showing zero
unemployment benefits in cases of identity theft will help taxpayers avoid
being hit with an unexpected federal tax bill for unreported income.
The IRS previously
issued guidance requested by states on identity theft guidance regarding unemployment compensation reporting. No Forms 1099-G should be issued to those
individuals the states have identified as ID theft victims.
Know the signs of
Taxpayers do not
need to file a Form 14039, Identity Theft Affidavit, with the IRS regarding an
incorrect Form 1099-G. The identity theft affidavit should be filed only if the
taxpayer's e-filed return is rejected because a return using the same Social
Security number already has been filed.
See Identity TheftCentral for more information about the signs of identity theft and general
steps that should be taken.
taxpayers are concerned that their personal information has been stolen and
they want to protect their identity when filing their federal tax return, they
can request an Identity Protection Pin (IP PIN) from the IRS.
Protection PIN is a six-digit number that prevents someone else from filing a
tax return using a taxpayer's Social Security number. The IP PIN is known only
to the taxpayer and the IRS, and this step helps the IRS verify the taxpayer's
identity when they file their electronic or paper tax return.
Reminder for those
receiving unemployment benefits: Report your benefits when you file your tax
The IRS reminds
taxpayers that unemployment benefits are taxable, and they should watch their
mail for a Form 1099-G. In some states, taxpayers may be able to receive the
Form 1099-G by visiting their state's unemployment website where they signed up
for account benefits to obtain their account information.
Starting in January
2021, unemployment benefit recipients should receive a Form 1099-G, CertainGovernment Payments from the agency paying the benefits. The form will show
the amount of unemployment compensation they received during 2020 in Box 1, and
any federal income tax withheld in Box 4. Taxpayers report this information,
along with their W-2 income, on their 2020 federal tax return. For more
information on unemployment, see Unemployment Benefits in Publication 525.