IRS Guidance on Identity Theft of Unemployment Benefits

By Mark Castro, CPA
February 9, 2021

The IRS is providing the following guidance for taxpayers that received a Form 1099-G for unemployment benefits they did not actually get because they were victims of identity theft (someone filed an unemployment claim using stolen personal information for an individual who did not file a claim).

• Do not report the incorrect amount on their 2020 federal return. Taxpayer should only report the actual income they received
• Contact their appropriate State agency and request a corrected Form 1099-G

Not reporting the amount on the incorrect 1099-G will not delay the processing of their federal return or delay any refund due to the individual. However, if the taxpayer does not request a corrected 1099-G from their State they will receive a notice from the IRS later in the year regarding the unemployment income reported on the 1099-G.

See the following on the IRS website for more information:

• News release IR-2021-24 (IRS Offers guidance to taxpayers on identity theft involving unemployment benefits)
• IRS Alert – Identity theft guidance regarding unemployment compensation reporting