![]() Taxpayers who want to receive unemployment compensation can apply for benefits through their state programs. Generally, employees who are laid off or who lose their jobs through no fault of their own typically qualify for unemployment benefits. Who's eligible for unemployment benefits? Some states also count unemployment benefits as taxable income. The IRS considers unemployment compensation to be taxable income-and requires that it be reported on your federal tax return. If you received unemployment benefits this year, you can expect to receive a Form 1099-G “Certain Government Payments” that lists the total amount of compensation you received. These benefits are mostly funded by taxes that are paid by employers at the federal and state levels. Unemployment compensation is a form of monetary assistance provided by the federal and state governments to people who are out of work. If you choose to have income tax withheld from your benefits, the total federal tax withheld will appear in Box 4 of Form 1099-G, and the state tax withheld will appear in Box 11.Report your unemployment compensation on Schedule 1 of your federal tax return in the “Additional Income” section and carry the information to your main Form 1040.Box 1 of Form 1099-G “Certain Government Payments,” from your state unemployment agency shows the amount of compensation to report.The IRS and some states consider unemployment compensation to be taxable income, that you are required to report on your federal tax return.What to do next? Forge the amount into box 16 and cross my fingers that I won't get in trouble or submit on paper? (I used to work at the IRS for a short period of time, and the last thing I want to do is file on paper. However, I am unable to proceed with any further advise. I apologize for not resolving this to your satisfaction. As far as the box 12a issue, it is mislabeled & is the box 14 number. I know it is not the answer you are looking for. I know it is not what you prefer to do, but, based on the research that was done, it is the necessary step. ![]() If you want to laugh, here's the response I got after 2 days of working with several TT reps:Īfter discussion with a person above my level, we have concluded, the way to handle this is for you to put the same number in box 16 as is in box 2. I have used TurboTax for 4 years straight, and did not have this problem in any past years, even though all my prior 1099's have box 16 as blank. I did, and after going through the phone prompts, they said they no longer answer questions about forms, and I have to seek the info online. (Even though the IRS instructions for filling out a 1099-R reads that boxes14-19 are reserved for local use! I also saw online that these boxes are optional and not all states use them.) The state said I should call the IRS. I called NY State Tax department, and their answer is that since the 1099-R is a federal form, they can't answer as to what, if anything, needs to be in box 16. To me, that is falsely altering the 1099-R because I really don't have anything in box 16! TurboTax's solution is for me to put the amount from 2a into box 16. This amount is usually in box 2a-Taxable amount.īut my 1099-R's have box 16 as blank. So they're saying that if you had tax withheld, you must have an entry in 16 that shows the dollar amount that was reported to the state. ![]() The error message is trying to say that since I put an amount in box 14 -State Tax Withheld, box 16-State Distribution, can't be zero or blank. The actual problem (in my case anyway) is that my box 16 is zero or blank. You'll see that the snippet of your tax return (below the error message) is correct. It gets boiled down to this: Yes, there is a mistake with the error message - box 12 now being box 14, but it doesn't interfere with any calculations. (I haven't printed my return yet, so I didn't see the printed message you saw.)
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