I understand the confusion because WA was inserting the following into their taxpayer's 1099-G
https://paidleave.wa.gov/app/uploads/2022/01/2023-2024-1099s-insert.pdf
But more recently, a client was issued CP2000 Notice from IRS that stated the 1099-G (Unemployment) income would be considered federally taxable.
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So while the issue was cloudy in 2022, some taxpayers seem to be getting rained out with belated tax notices and interest, but interestingly, no penalty.
