Pennsylvania Unemployment

Many people seem to have questions regarding Pennsylvania unemployment payments, 1099 forms and tax this time of year. Here are the answers to some of the most common questions.

Q: Are all Pennsylvania unemployment benefit recipients required to pay taxes?

A: Yes. Pennsylvania unemployment benefits are subject to federal and state taxes, just like any other income. You’re still required to file a tax return, as always.

Q: I didn’t keep track of my unemployment benefit income for 2006. How do I find out much I earned?

A: In January 2007, the Pennsylvania unemployment office mailed out 1099 forms to everyone who collected benefits last year. You should have received your statement. However, if you did not receive your statement, or your need a duplicate, contact your nearest Pennsylvania Dept. of Labor.

Q: What exactly is a 1099 statement?

A: A 1099 statement is a record of all the benefits or unearned compensation you received the previous year. In this case, it would show your unemployment benefits or unearned income from 2006.

A 1099 statement also includes any deductions to your unemployment benefits. Examples of deductions include court order child support or restitution. Some people elect to have taxes withheld from their unemployment benefits. These deductions are also on the 1099 form.

Q: What is the process to being re-issued a 1099 statement?

A: The Pennsylvania Dept. of Labor will verify your current address and re-issue your statement. You should receive your statements within a week.

Q: What if I need copies of 1099 statements from previous years?

A: To get copies of 1099s from previous years, contact your local Pennsylvania Dept. of Labor. Your address will be verified and you’ll receive the copies in approximately a week.

Q: Are people who receive unemployment benefits the only ones that need a 1099 statement at tax time?

A: No. Independent contractors are also issued 1099 forms. As self-employed individuals, independent contractors often don’t pay tax on their income when it’s earned. The law says everyone needs to pay state and federal taxes. So independent contractors need to show the taxman what they’ve earned so they can pay their tax bills.