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People getting mystery 1099 tax forms for unemployment benefits

Never filed? You may be an ID theft victim
For what weird tax is your state charging you?
Posted at 5:53 PM, Jan 29, 2021
and last updated 2021-01-29 22:17:52-05

This is W-2 and 1099 season, when companies send you tax statements for what you earned last year.

But check those statements carefully. Some people are receiving 1099 forms saying they earned unemployment benefits when they never filed for unemployment.

Joe McFarland of Fairfield, Ohio, is struggling to understand what's been showing up in his family's mail.

His mother, long retired, received a 1099 form claiming she received thousands of dollars in unemployment last year from the State of Ohio.

"She got a 1099 from unemployment," McFarland said. "But she's 87 years old and hasn't worked in years."

But as if that wasn't enough trouble, he says, "yesterday my wife got one, too."

It shows she received $11,000 in Ohio unemployment benefits in 2020.

Only problem: his wife was gainfully employed, and never filed for help.

"No she never applied for it, never earned anything," he said.

What these forms mean

Unfortunately, these forms are not fakes in most cases. And they are certainly not a joke.

If the 1099 includes your name, address, and last 4 digits of your Social, it probably means someone filed for unemployment under your name, according to state unemployment officials

Thomas Betti, spokesman for Ohio's Job and Family Services, tells WCPO your Social Security number was probably stolen in a data breach.

"They are likely a victim of identity theft," he said.

And it is not just in one area. It turns out people all over the country are receiving 1099 forms, from all different states.

Betti says if you receive one, you should go to your state's unemployment website immediately and fill out a fraud report.

Ohio's site even has a big red button for this, as it is seeing thousands of cases of fraud.

The state can then send a corrected 1099 to the IRS that shows you did not receive benefits.

"We will send them a corrected 1099 form, that says zero," Betti said.

In the meantime, Betti says, you should not report it on your 1040 tax form, or the IRS will assume you received that money.

McFarland thinks its outrageous that someone can file for benefits under your name. But they can, and do.

Finally, this is one scam where you don't just want to rip up or shred the form, because a copy is on the way to the IRS.

And unless you have it corrected, the IRS will want you to pay taxes on the money that went to a scammer.

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Don't Waste Your Money

8:47 PM, Oct 17, 2018

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