Some who got unemployment benefits say they’re getting inflated tax bills

Some who got unemployment benefits say they're getting inflated tax bills

HONOLULU, Hawaii (HawaiiNewsNow) - Some unemployment claimants say they’re getting overbilled on their taxes.

Mary Freeman of Ewa Beach is a retired aerospace worker and a part-time employee at Macy’s Kapolei.

She was furloughed twice during the pandemic and said she recently received a federal 1099-G with a figure that does not match up with the money she got in unemployment benefits.

The difference is more than $1,500.

“I didn’t get these monies,” said Freeman. “I’m paying tax on something I didn’t receive.”

Her bank statements show nearly $5,300 of unemployment benefits were deposited in her account. However, her federal 1099-G shows a figure of $6,827.

Freeman isn’t alone.

Hank Erwin owner of Hank’s Tax Service said about half a dozen people walked into his office Tuesday with the same issue.

“Another person says they had gotten zero money, but they were still given a 1099-G, their whole amount is pending,” Erwin said. “They haven’t gotten it, but they would still put on the 1099-G as if they had gotten it, that’s the scary part.”

The state Department of Labor and Industrial Relations confirmed numerous people have contacted them with similar concerns, but said they have so far found no inaccurate 1099s.

State Labor Director Anne Perreira-Eustaquio appear to be missing key elements of their benefits, including those distributed through different programs and additional monies approved by Congress.

But Freeman said she did not get money from multiple programs.

“I don’t have a mixed history and since I have not been able to get through to them, how would they know that my issues are what they are if you can’t talk to anyone?” said Freeman.

“If nobody’s getting back to you, that’s kind of a grandiose statement.”

The state DLIR had this advice for those who believe they have gotten incorrect 1099s:

“Taxpayers who receive an incorrect form 1099-G for unemployment benefits they did not receive should contact the issuing state agency to request a revised form 1099-G showing they did not receive these benefits. Taxpayers who are unable to obtain a timely, corrected form from states should still file an accurate tax return, reporting only the income they received. A corrected form 1099-G showing zero unemployment benefits in cases of identity theft will help taxpayers avoid being hit with an unexpected federal tax bill for unreported income.”

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