It has been reported to the IRS and various State Unemployment Agencies that some taxpayers are receiving 2020 1099-Gs reporting taxable unemployment benefits, even if they did not file for unemployment benefits. In 2020, identity thieves used stolen personal information to file fraudulent unemployment claims with money sent to the thief’s accounts.
The below article is an excellent summary of the situation and explains the steps to request a corrected 1099-G. These 1099-Gs are reported to the IRS as taxable income; therefore, failure to correct this error now will cause the IRS to issue a notice with additional tax, penalties, and interest due, once the issued 1099s are matched with the tax return filed. Sometimes this matching is not completed for 1 – 2 years after the taxpayer files their return.
