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UNEMPLOYMENT BENEFITS ARE TAXABLE State of Michigan mails out jobless benefit statements for 2006
JANUARY 17, 2007 - Tax season is approaching, and the state of Michigan will soon be mailing out year-end statements to anyone who received unemployment benefits in 2006.
"Unemployment benefits are taxable, and those who received benefits will need these statements to prepare their 2006 state and federal tax returns," Liza Estlund Olson, acting director of Michigan's Unemployment Insurance Agency (UIA), explained.
The statements, called 1099-G or "Statement for Recipients of Unemployment Compensation Payments," report how much individuals received in unemployment benefits last year. The UIA prepares the annual statements.
"This year we'll be sending out approximately 570,000 1099-G forms," Olson said. "The mailing will begin this Friday, January 19, and will be completed by January 26."
Starting Thursday, February 1, those with questions about their 1099-G or those who do not receive the statement can telephone the UIA or visit an agency Problem Resolution Office (PRO) for help.
The toll-free UIA telephone numbers unemployed workers can call about their 1099 statements are:
UIA Problem Resolution Offices are located in Gaylord, 400 W. Main St.; Grand Rapids, 3391 Plainfield Ave., NE; Lansing, 5015 S. Cedar St.; Livonia, 33523 West 8 Mile Rd.; Marquette, 2833 US 41 West; and Saginaw, 614 Johnson St. The offices are open weekdays from 8:00 a.m. to 3:00 p.m.
One frequent question about the 1099-G statement concerns the amount of compensation it reports.
"The total compensation figure on the statement includes not only the amount of benefits paid but also any restitution or court ordered deductions, such as Friend of the Court payments," Olson 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."
If workers chose to have state and federal income taxes deducted from their unemployment benefits in 2006, the 1099-G reports the amount of taxes withheld.
Olson noted that the agency must also send the 1099-G information to the IRS and the Michigan Department of Treasury.
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