How To Report Unemployment Insurance Fraud
This article is current as of February 16, 2021. Please note that some of the information in this article is subject to change. To receive the latest information, call our North Bay office at (415) 924-6240 to speak to a tax advisor.
I Didn’t Receive Unemployment but the EDD Thinks I Did
If you receive a Form 1099-G from the California Employment Development Department but you didn’t receive any unemployment insurance or pandemic unemployment assistance benefits, then you might be a victim of fraud.
The EDD recently reported that more than $11 billion — about 10% of all the money California paid in unemployment benefits for 2020 — was paid to fraudulent UI claims, and they’re currently investigating even more potentially fraudulent claims.
When a fraudulent claim is filed using your information, it will appear on Form 1099-G, a record of the total taxable income you were issued from the EDD in 2020.
If you believe you are the victim of UI fraud, hiring a trusted North Bay tax specialist can help you navigate the process of reporting the fraud and filing your state and federal tax returns correctly.
How Do I Report Suspected Fraud?
If you receive a Form 1099-G that reports UI that you didn’t receive, you should report it to the EDD immediately in one of the following ways:
- Call (866) 401-2849
- Visit Ask EDD and select “Form 1099-G” and “Report Fraud”
If you believe fraud has occurred but you haven’t received a 1099-G yet, you should fill out the EDD’s Fraud Reporting Form.
Keep in mind that the EDD is dealing with a larger workload and slower response times due to the COVID-19 pandemic.
What Will Happen Once I Report Suspected Fraud?
After you file a report, the EDD will investigate your claim as identity theft. This means they will need you to verify your information by sending you identity forms to fill out.
Once the EDD completes the investigation and finds that UI fraud did occur, they will remove the claim from your social security number and send you a corrected Form 1099-G.
How Will Unemployment Insurance Fraud Affect My Taxes?
Marin County residents do not have to pay local or state taxes on UI or pandemic unemployment assistance benefits, but you do have to pay federal taxes on those benefits.
If your federal tax return doesn’t match the 1099-G you are issued, then your tax refund will likely be delayed.
However, since the EDD is dealing with unprecedented delays this year, you may not receive your 1099-G until early March.
Get Help from an Experienced Tax Professional
If you believe you are a victim of fraud, you shouldn’t have to handle it on your own. When you work with ProActive Tax Solutions, we can help ensure that your return is filed correctly and all necessary steps are taken to report the fraud.
And even though the timeline for issuing corrected 1099-Gs is unclear this year, we can help ensure that you receive your return as quickly as possible given the complicated circumstances.
Since we specialize in tax preparation for the North Bay, we work hard to keep up with the latest updates from the IRS and the State of California. Give us a call today at (415) 924-6240 to receive a free consultation with Georgia Rogers, E.A..