Maine Department of Labor Issues Corrected 2018 Tax Documentation for Certain Unemployment Insurance Beneficiaries
March 8, 2019
For Immediate Release: Thursday, March 7, 2019
Contact: Evelyn deFrees Director, External Relations Maine Department of Labor 207-462-0815
Maine Department of Labor Issues Corrected 2018 Tax Documentation for Certain Unemployment Insurance Beneficiaries Augusta, Maine: The Maine Department of Labor announced today that it is reissuing the required tax statement, form 1099G, to some unemployment insurance (UI) benefit recipients in Maine. The Department is reissuing the forms to 1,427 people due to a technical error caused by a new unemployment insurance benefit system used to generate the forms for the first time this year.
Corrected statements will be issued this week only to individuals who received a check from the Department of Labor for an "excess reimbursement" of a benefit debt during 2018. All other 1099G statements previously issued are correct. If individuals receiving the corrected forms have not yet filed their federal and state income tax returns, they will need to use the corrected 1099G statements when filing. If individuals receiving a corrected 1099G have already filed their tax returns, they may need to file amended returns. The corrected 1099G statements will include a letter with online links to obtain the forms and instructions for filing amended forms.
"The Department of Labor has taken immediate steps to ensure all unemployment insurance recipients have correct tax statements to file 2018 returns despite an error caused by the new benefits system. We are already taking steps to ensure this situation won't occur in the future," said Commissioner Laura Fortman. "Corrected statements have been sent to affected individuals. Until December 31, 2019, the Department will reimburse any individual up to $75 who needs the help of a tax preparer to file an amended tax return that results from this error. Maine's unemployment system must work properly to serve working families as they bridge the gap between jobs. The Department of Labor will continue to work to improve the new unemployment system to ensure it meets that responsibility."
Unemployment benefits are considered taxable income for both federal and state income tax filing for the year in which the benefits are received. The amount of UI benefits received during the year are reported on a 1099G statement issued by the Department of Labor at the end of January for the prior tax year. The 1099G form also shows any payments made by the benefit recipient to reduce or pay off any "benefit debt" accrued during the year. "Benefit debt" occurs when an individual receives benefits for which it is determined she or he is not eligible. Payments made to repay a benefit debt show up as a "credit" on the 1099G form and can potentially reduce the taxable income for federal and state income tax purposes.
The Department of Labor identified an inflated "credit" amount on a subset of issued 1099G tax statements going to a group of individuals in the process of repaying benefit debt who ended up paying an "excess reimbursement," or a debt payment that exceeded the amount owed. When an excess reimbursement occurs, the Department resolves the benefit debt and issues a check for the excess reimbursement directly to the individual. The 1099G statement should only reflect a credit amount for the actual payments made to clear the benefit debt. On the incorrect 1099G forms, the credit amount included both the actual benefit debt payments made and the excess reimbursement amount that had been already returned to the individual. As a result, the 1,427 incorrect 1099G tax statements were issued with larger "credit" amounts than were accurate.
Links to Internal Revenue Service (IRS) and Maine Revenue Service (MRS) forms and instructions can be found on the Department's website at http://www.maine.gov/unemployment/. If individuals receive a corrected 1099G and have further questions, they may contact the Department at: 1-800-593-7660.
A total of 29,609 Maine people received 1099G tax statements for unemployment benefits received in 2018.
The links listed below are to the forms and instructions for filing amended tax forms for the IRS and the Maine Revenue Services.
Federal amended tax return form 1040X:
https://www.irs.gov/pub/irs-pdf/f1040x.pdf Federal amended tax return form 1040X instructions:
Maine Revenue Services
State amended tax return form 1040ME:
https://www.maine.gov/revenue/forms/1040/2012/121040Xdownloadable.pdf State amended tax return form 1040ME instructions:
Frequently Asked Questions about 1099G