PUA Claim from 2020 finally paid retroactively in March 2021; NO 1099-G received and NOT included in 2020 filing

[geraldj100]

I applied for PUA benefits with State of Oregon in June 2020...and thanks to the inept computer systems etc, my claims were NOT processed and paid until early March 2021. Meanwhile I had already filed my 2020 taxes (using TurboTax) in February. So far I have NO 1099G paperwork from state although their system does show both federal and state taxes withheld from my checks issued in March 2021.

Do I need to file amended return? And must I secure paperwork (1099G) from State? I've asked State Dept of Employment for guidance, but they are clueless on what to do.

[HelenC12]

No, don't amend your 2020 income tax return since you received the unemployment payments in tax year 2021, they'll be reported on your 2021 income tax return.

• Next year, you'll get a 2021 1099-G form that you'll enter on your 2021 income tax return.
• The IRS considers unemployment income as taxable income, as do most states. 

[geraldj100]

But that makes no sense as the payments received were for 2020 claims and had State handled correctly at onset would have been received in 2020. Plus the recent stimulus bill enacted only exempts (up to around $10,000) the federal taxes withheld or owed for 2020 UI/PUA! IRS says it is going to refund to those who already filed the taxes that were paid/withheld. BUT since technically I did NOT receive my 2020 claims until March 2021, I am seemingly screwed unless State documents to feds that the withholdings/payments were for 2020.

[HelenC12]

Most individuals are cash basis, calendar year taxpayers. Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.

Hopefully, Congress will extend the unemployment compensation exemption into tax year 2021.