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UNEMPLOYMENT BENEFITS ARE TAXABLE State of Michigan mails out jobless benefit statements for 2009
JANUARY 19, 2010 - Tax season has arrived and the state of Michigan has begun mailing year-end statements to anyone who received unemployment benefits in 2009.
"Unemployment benefits are taxable, and those who received benefits will need these statements to prepare their 2009 state and federal tax returns," Stephen Geskey, director of Michigan's Unemployment Insurance Agency (UIA), explained.
He pointed out, however, that the American Recovery & Reinvestment Tax Act exempts the first $2,400 in unemployment benefits paid in 2009 from federal income taxes.
The statements, called 1099-G or "Certain Government Payments," are prepared by UIA and report how much individuals received in unemployment benefits last year. They also detail how much in state and federal income taxes were deducted from a person's unemployment benefits, if the individual chose to have the taxes withheld.
"Starting today, January 19, UIA began mailing more than 913,300 1099-G forms to those who drew any unemployment benefits last year," Geskey said.
For the first time, UIA is also making the 1099 statements available online starting January 28.
"Those who have established free online web accounts with the agency will be able to view and print out their 1099 statement from our website at www.michigan.gov/uia," Geskey said.
UIA has made it easy to create an online account and offers an online video showing unemployed workers how to establish their own personal web account with the agency.
"Individuals can go to our website, click on ‘webcasts,' then click on ‘unemployed workers' and, finally, select the webcast - ‘Claim Portal - Online Services for Unemployed Workers,'" Geskey explained.
A common question about the 1099-G statement concerns the amount of compensation it reports.
"The statement's total compensation figure includes the amount of benefits paid, even though these payments may have later been offset by restitution paid back by the individual, or by court ordered deductions such as Friend of the Court payments," Geskey explained. "Because of these required deductions, jobless workers may have actually received less than what is reported on the 1099-G. We advise those with these types of deductions to consult with the Internal Revenue Service (IRS) to learn how these deductions affect their taxes and for instructions about reporting them."
Geskey pointed out that the agency also sends the 1099-G information to the IRS and the Michigan Department of Treasury.
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