MONTPELIER – The Vermont Department of Labor (VDOL) is finalizing validation efforts this week and working with the Department of Buildings and General Services to print and mail new 1099-G tax forms by the beginning of next week to all 2020 unemployment insurance claimants.
This is a result of the processing issue that occurred on January 29, 2021, when a series of incorrect 1099-G tax forms were sent to unemployment insurance claimants from the Department of Labor. On February 1, 2021, the Department began receiving reports that some 1099-G documents contained information for different claimants. The Department of Labor immediately stopped all 1099-G mailing efforts, launched an investigation into the circumstances surrounding the processing issue, notified claimants and recalled all VDOL 1099-Gs, and began a plan to reissue new 1099-Gs to all 2020 claimants.
“We know claimants are eagerly awaiting their new 1099-Gs from the Department, and we want them to know they should expect them next week. Over the last couple weeks, teams from the Department of Labor and across state government, have worked to validate and review tax information before reissuing the 1099-G documents,” said Commissioner Michael Harrington. “Ensuring the information is the best it can be, has been our top priority.”
Claimants will receive a 1099-G form for each program they collected unemployment insurance benefits from during the 2020 calendar year. This means many claimants should expect multiple 1099-G forms if they collected benefits for most of the year, especially during the spring, summer and fall, and if their unemployment was a result of the COVID-19 pandemic.
The Department of Labor administered nine different types of benefits through five different unemployment programs in 2020. Claimants can identify the program their 1099-G is for by using the code in the bottom left-hand corner of the tax document.
001-UI: This 1099-G represents regular Unemployment Insurance (UI) benefits received in 2020, including extended benefit weeks, and the additional $600 added to weekly benefits during April 4 through July 31.
002-PUA: This 1099-G represents Pandemic Unemployment Assistance (PUA) benefits received in 2020, including the additional $600 added to weekly benefits during April 4 through July 31.
003-LWA: This 1099-G represents Lost Wage Assistance (LWA) benefits received in 2020. This was a federal program which provided an additional $300 per week to eligible unemployment insurance claimants between August 1 and September 5. This payment was mailed in a check, separate from weekly benefit payments.
004-VSTS: This 1099-G represents Vermont Short Term Supplemental (VSTS) benefits received in 2020. This program provided an additional $100 per week to claimants between September 27 and October 31. This payment was mailed in a check, separate from weekly benefit payments.
005-TREAS: This 1099-G represents a one-time payment of $1,200 issued by the State on April 20. This was for Vermonters who had filed for unemployment insurance benefits between March 15 and April 4 but had not yet received any benefit payments.
Claimants had the option to have personal income taxes withheld when they enrolled in UI and PUA, however, taxes were not withheld from LWA, VSTS, or TREAS payments. That means claimants who received these benefits will need to pay state and federal income taxes on them.
Personal income tax returns are due to the IRS and Vermont Department of Taxes by Thursday, April 15, 2021. For taxpayers concerned about meeting the deadline, information can be found on the Department of Taxes’ website at tax.vermont.gov/individuals/file-and-pay/request-extension, including how to request an extension to file federal or state personal income tax returns.
The Department will continue to provide updates to claimants by letter, email, and social media. More information can also be found online at labor.vermont.gov/1099-incident-updates. Claimants who do not have access to the internet can contact the Unemployment Insurance Clamant Assistance Center at 877-214-3332 and select ‘Option 1’ for updates on the 1099-G issue.