The Colorado Department of Labor mailed 1099-G statements to anyone who received unemployment benefits in 2006, during the month of January. A representative of the Department says, “Unemployment benefits are taxable, and those who receive benefits will need these statements to prepare their 2006 state and federal tax returns.”
The statements were mailed in January and should have been received no later than February 15, 2007. If you were unemployed in 2006, collected unemployment benefits, and did not receive a 1099-G statement, you should contact the Colorado Department of Labor.
Failure to claim Colorado unemployment benefits could get you into a lot of trouble with the Internal Revenue Service. The Department of Labor is required to submit reports of unemployment earnings to the IRS and the Colorado Department of Treasury. By submitting these reports, both the federal and state governments are aware of income received by unemployed workers.
When you prepare your tax return, you will need to refer to your 1099-G for your income and any withholdings. If you chose to have the state and/or federal government withhold taxes prior to issuing your benefits, the 1099-G will report these amounts.
In some instances, the amount of earnings reported on the 1099-G (minus tax withholdings) will be higher than the amount you actually received. If this is the case, and you are unsure why the amounts are different, you may contact the IRS to ask for an explanation. They can also give you instructions on how to report your earnings on your tax forms.
Before you contact the IRS because of a discrepancy in the earnings, take a moment to think about possible explanations. Were there court-imposed sanctions on your earnings? Do you pay alimony or child-support? Are these payments attached to your wages? Were you required to pay back a portion of previous earnings or bonuses you received prior to your unemployment? These could explain the difference between the amount you actually received for unemployment and the earnings reported on the 1099-G.
