Did You Receive an Incorrect 1099-G?

If you’ve received Form 1099-G, and it shows unemployment benefits received (in Box 1), but you didn't apply for or receive unemployment benefits, you may have been a victim of identity theft. It is recommended that you contact the authorities.   

A number of authorities have reported a surge in people receiving incorrect Form 1099-G copies as their 2020 tax documents are being sent out to them. This stems from the effort to get pandemic relief to people as quickly as possible about a year ago.  In that rush, scammers and other bad actors took advantage of the opportunity by filing fraudulent claims for unemployment with ill-gotten personal information from other people.  

What to Do if You Receive an Incorrect 1099-G?

If you receive a 1099-G for unemployment benefits, but haven’t actually received unemployment benefits in 2020, DO NOT report these benefits as income.  If you did receive benefits, double-check that the amount on your 1099-G form matches the amount of benefits you received.  

The IRS has released guidance stating that anyone who receives an inaccurate 1099-G should contact their state agency to request a corrected form.   In Ohio, you can report the incident and request a new form at the Ohio Department of Job and Family Services’ website.  If you’re not in Ohio, you can find your state’s appropriate agency listed here.  If you aren’t able to get a correct form before you file your tax return, you should file anyway and report only the information you have received.  The IRS will be sent a correct form by your state agency, so you don’t need to worry about notifying them.  

You may be wondering: if I receive Form 1099-G for unemployment benefits I didn’t request and someone else received, do I need to pay taxes on them?  The IRS has said no, that’s not the case.  Just make sure you contact your state agency to request a revised Form 1099-G stating that you didn’t receive the benefits in question. 

There is a method of filing an Identity Theft Affidavit, Form 14039, with the IRS as well.  You don’t need to do this unless you e-file your federal return, and it's rejected by the IRS because a return using your Social Security number had already been filed. 

If you're worried about your personal information being stolen and then used to file a fraudulent tax return, you can request an Identity Protection PIN (IP PIN) from the IRS. An IP PIN is a six-digit number that prevents someone else from filing a tax return using your Social Security number. The IP PIN is known only by you and the IRS, and this step helps the IRS verify your identity when you file an electronic or paper tax return.

There are two ways to get an IP PIN.  If you're a confirmed identity theft victim, the IRS will mail you an IP PIN if your case is resolved prior to the start of the next filing season. Otherwise, you should use the IRS's online Get an IP PIN tool. 

It can also be useful to visit IdentityTheft.gov to report this 1099-G fraud to the FTC and get help with the next important recovery steps. This will allow you to place a free, one-year fraud alert on your credit, receive free credit reports, and close any fraudulent accounts opened in your name. You can also add a free extended fraud alert or credit freeze to your credit report, making it more difficult for an identity thief to open new accounts in your name.  For the next year, be sure to review your credit report often so you can spot an address any potential problems quickly.  You can do this at AnnualCreditReport.com. 

Going forward, the FBI recommends some general tips to follow to keep your identity secure.

• Be wary of telephone calls and text messages, letters, websites, or emails that require you to provide your personal information or other sensitive information, especially birth dates and Social Security numbers.
• Be cautious with attachments and embedded links within email, especially from an unknown email sender.
• Make yourself aware of methods fraudsters are using to obtain personal information and how to combat them by following security tips issued by the Cybersecurity and Infrastructure Security Agency, including:
• Avoiding Social Engineering and Phishing Attacks
• Protecting Against Malicious Code
• Preventing and Responding to Identity Theft
• Monitor your bank accounts on a regular basis and request your credit report at least once a year to look for any fraudulent activity. If you believe you are a victim, review your credit report more frequently.
• Immediately report unauthorized transactions to your financial institution or credit card provider.
• If you suspect you are a victim, immediately contact the three major credit bureaus to place a fraud alert on your credit records. Additionally, notify the Internal Revenue Service by filing an Identity Theft Affidavit (IRS Form 14039) through irs.gov or identitytheft.gov.

In our online world today, it takes vigilance to keep our accounts safe.

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Jake Butcher CFP® Jake became a member of HCM Wealth in 2010. He is a CERTIFIED FINANCIAL PLANNER™ professional and a member of the HCM Technology Committee.  He enjoys spending time with his wife, Katy, daughter, Milly, and son, Graham. Some of his hobbies include, playing basketball, golf, tennis, trying new restaurants and cheering on the UC Bearcats.