(Rocky Hill, CT) — 2020 was clearly not like any other year — and navigating through the tax season will be no different. The Connecticut Society of CPAs (CTCPA) is warning residents to pay close attention to the accuracy of their 2020 financial documents, especially 1099s recording unemployment funds received.
According to the CT Department of Labor (DOL), Connecticut residents who collected state unemployment insurance (UI), Pandemic Emergency Unemployment Compensation (PEUC), and/or Extended Benefits (EB) during 2020, as well as collected Pandemic Unemployment Assistance (PUA) during the same year, will be issued two 1099 to be filed with their taxes. Form UC-1099G will cover the UI, PEUC and EB benefits and Form UC-PUA-1099G will cover the PUA benefits.
“There were many financial buckets to help residents through 2020, which is why we are cautioning them to review their 2020 financial documents in great detail. We are particularly concerned about 1099s accurately reflecting compensation and in some cases overpayment of unemployment benefits,” said CTCPA Executive Director Bonnie Stewart.
The rise in unemployment across the state, up 4.4% from the same period last year to 8%, has challenged the State of Connecticut’s technology infrastructure, which is due for an upgrade this year. The accuracy of the antiquated system has been tested, and in some cases has led to the overpayment of unemployment compensation, which must be paid back by the resident even if it was not their error. Other instances of overpayment could be fraud, willful nondisclosure or willful misrepresentation of the unemployment information by the claimant.
“While it may take extra time to go through the financial review process during tax time, residents need to protect their earnings and benefits. If a concern arises, a resident should contact a CPA to walk them through the issue and determine the best solution,” said Stewart.
Find a CPA near you at www.ctcpas.org/FindACPA.
The CTCPA also suggests residents stay attuned to the increased level of fraudulent activity across the country.
“Unfortunately, fraud is occurring all around us. We each need to keep close tabs on our credit scores, open your mail right away rather than letting it pile up and be relentless in your financial document reviews,” said Stewart.