by Timothy McQuiston, Vermont Business Magazine The Vermont Department of Labor is aware of a mailing and printing process error that impacts 1099-G tax documents that were mailed on Friday and Saturday (January 29 – 30). If you received a 1099 from the Department of Labor, they are asking that you DO NOT OPEN IT. VDOL will send you a self-addressed stamped envelope in which to return it. VDOL suspects a printing error resulted in some people getting someone's else's information. This could have occurred even if the address information appears correct.
If you have already opened the 1099-G, please put it in a secure place and wait for the SASE in order to return it (them). Do not discard or destroy it. A new 1099-G will be issued.
The result is that an individual may have received someone else's personal information.
All 1099s will be re-issued. VDOL is in the process of investigating how this error occurred. No third-party vendors were involved, as all the printing was done by the state of Vermont.
As a reminder, people getting unemployment insurance benefits may get, or may have already received, several 1099-G tax forms. All will need to be returned to ensure all potential forms with errors are accounted for.
There are several supplemental programs that were added to the unemployment benefit program because of the COVID-19 pandemic. These include the PUA, PEUC, LWA and VSTS (see list below).
In a press briefing today, Labor Commissioner Michael Harrington said the supplemental programs that have generated calls appear to be for only the LWA and VSTS representing about 55,000 claimants.
Harrington said this was "frustrating and discouraging" for claimants and the department. He said they will spare no expense or any amount of effort despite the enormity of the task.
"We're committed to getting this right," he said.
The regular UI benefit program 1099s have not yet been issued. About 180,000 total 1099s will be issued eventually. In a normal year, VDOL would issue on the order of 6,000 1099s.
Harrington stressed that payment benefits are not be affected.
He also said that individuals may get more than one or even several 1099s if they qualified for more than one of the supplemental programs and/or regular UI. Because of the high level of unemployment early on in the pandemic, about 90,000 regular UI 1099s will be issued.
As has been previously reported, criminal organizations have attempted to get UI benefits fraudulently both in Vermont and across the nation.
Harrington urged people to check with the credit bureaus and review credit card statements to avoid a data breach.
He is not aware of any data breaches yet associated with today's announcement concerning the 1099s.
Harrington issued this statement Monday afternoon:
On Monday, February 1st at approximately 9:30am the Department of Labor began receiving reports regarding discrepancies involving 1099G tax documents that were issued by the Department for unemployment insurance benefit purposes. Upon further review of the reports that were coming to the Department, we learned that individuals were receiving 1099G tax documents where the name and mailing address did not match on the front of the envelop and in other cases where the name and social security number on the inside did not match the recipient. Additionally, we believe that in certain cases individuals may have received another claimant’s name and social security number.
As of now, the Department believes this issue is specific to the 1099s that were associated with the Lost Wages Assistance (LWA) program and a portion of the Vermont Short Term Supplemental benefit population; however, the Department is issuing a mass recall of ALL 1099s that have been mailed, regardless of program. This is being done out of an abundance of caution. The Department will be mailing further instructions to everyone who received a 1099, along with a self-addressed stamped envelope, to return the incorrect 1099 to the Department.
In addition, recognizing that there is the potential of the improper release of confidential and personal information, the Department has already been in contact with the Vermont Attorney General’s Office in accordance with state statute, and we will be providing all impacted individuals with the option to enroll in ID protection services. This improper release of data did not occur in every instance, but for those cases where an individual’s information was released, they will be provided the opportunity for identity protection. More specific information will be provided in a mailing to impacted individuals along with further instructions.
We are still in the midst of investigating this issue, the cause of the issue, and the next steps for impacted individuals, but in the immediate, individuals should do the following:
- If an individual receives a 1099 letter from the Department and the name and address on the front do not match, they should not open the 1099. The Department will mail them further instructions for returning the 1099.
- If an individual receives a 1099 letter from the Department and the name and address on the front do match, but when they open the 1099, the information on the inside does not match their information, they should hold onto the 1099. The Department will mail them further instructions for returning the 1099.
- If there is even the possibility that an individual’s confidential information was improperly released, the Department will mail them instructions for protecting their identity and how to enroll in consumer protection services through the Department.
- The Department will be issuing additional guidance to these populations later today/tomorrow along with next steps.
- This issue does not impact an individual’s claim or benefits. This issue is specific to the printing and mailing of 1099 tax documents.
- No incorrect tax information has been shared with the State or Federal tax departments, nor the IRS. The Department will ensure that correct 1099 tax information is sent to the tax departments and IRS for proper tax reporting.
- All claimants will receive an new 1099G tax document from the Unemployment Insurance Division.
- More information will be posted to the Department’s website at labor.vermont.gov.
I know there are many questions around how this happened and exactly who is impacted and to what extent, and I promise that we will conduct a thorough review of the incident; however, at this time we are focused on getting important information to impacted Vermonters as quickly as possible. This is obviously frustrating, as many Vermonters rely on state government to issue accurate and timely information, let alone during this public health emergency. I want to assure all of you that we are working as fast as we can to correct this error and ensure that this does not happened in the future.
VDOL we will be providing an update and further information on next steps
For updates visit labor.vermont.gov/unemployment-insurance.
What is a 1099-G?
The 1099-G is a tax form for Certain Government Payments. Every January, we send a 1099-G form to people who received unemployment benefits during the prior calendar year. If you received unemployment benefits during 2020, you’ll need the information to file your taxes.
The Department of Labor will notify claimants when 1099-Gs are mailed to Unemployment and PUA claimants, or provide update by February 1, 2021, whichever is sooner. Claimant tax information cannot be shared over the phone and claimants are not able to access this information by calling the UI Claimant Assistance Center.
However, the printing error noted above will result in delayed 1099s. However, as of today, the tax filing day has not changed.
NOTE: Claimants will likely receive multiple 1099-G forms for 2020. This is due to receiving benefits from multiple programs. Those programs that claimants would receive a 1099-G form form include:
- UI - Regular Unemployment Insurance benefits
- PEUC - Pandemic Emergency Unemployment Compensation
- EB - Extended Benefits
- High EB - High Extended Benefits
- FPUC - Federal Pandemic Unemployment Compensation
- PUA - Pandemic Unemployment Assistance
- LWA - Lost Wage Assistance ($300 payment for up to 6 weeks in Aug. 2020 - Sept. 2020)
- VSTS - Vermont Short Term Supplement ($100 payment for up to 5 weeks in Oct. 2020)
- $1,200 - Vermont Treasury's FPUC advance in April 2020
Where to find your 1099-G info
You’ll receive your 1099-G via USPS mail. 1099-G information may also be accessed through the UI Claimant Portal Welcome Screen for Regular UI Claimants (UI, PEUC and EB). PUA Claimants may access their tax information through the PUA weekly filing portal.
- Mail: We mail the 1099-G to the address we have on record as of mid-January, when the forms are printed. The U.S. Postal Service will not forward the 1099-G unless they have a change of address on file.
- Online: Sign in to the UI Claimant Portal or the PUA system to find 1099-G information on the Welcome Screen (Please note that LWA, VSTS and $1,200 prepayment information will NOT be available online).
Overpayments
A 1099-G does not get corrected when the claimant was put in overpayment and repaid the money in the same tax year. The IRS has instructions on how this is addressed on the tax filing. All requests must include the claimant's full name and the last 4 of the social security number.
If you don’t receive your 1099-G by mid-February
Please know that we are aware of a mailing and printing processing issue that will impact the delivery and mailing of 1099-G information. Please stay tuned for futher updates and instructions.
Information on UI Claimant Portal and PUA System
Remember, information from your 1099-G may also be accesses through the UI Claimant Portal and PUA system. However, information from Lost Wage Assistance (LWA), Vermont Short-Term Supplemental Benefit(additional $100 per week), and $1200 prepayments from March will not be available electronically.
What if I believe the information on my form is incorrect?
Please know that we are aware of a mailing and printing processing issue that will impact the delivery and mailing of 1099-G information. Please stay tuned for futher updates and instructions.
Information for victims of unemployment fraud
In 2020, an international crime ring used previously stolen personal information to fraudulently claim unemployment benefits in states across the country. If you believe you’re a fraud victim, or if you’ve already reported fraud to us but received a 1099-G for fraudulently paid benefits, please see the tax information for fraud victims page: https://labor.vermont.gov/unemployment-insurance/fraud.
Source: VDOL 2.1.2021