1099-G for unemployment claim approved in 2020 but paid in 2021

[lsciulli]

I am helping a college student who filed for unemployment for a few months in the spring of 2020 due to the pandemic.  Her $5000 in claims were accepted online but the processing of the checks was delayed.  When it came time to do taxes for 2020, she was instructed by the state to print her own 1099G from the online portal, but there was none in her account.  She included the unemployment comp and withholdings anyway, and ended up owing zero, because in 2020 the first $10,000 in unemployment comp was exempt in 2020.  

As it turns out, her payment from her April and May 2020 claims wasn't paid until Jan 2021.  This is why there was no 1099G for 2020 and she now has one for 2121.  I'm hate to leave it off because it will flag, but I can't include it income twice.  One option is to amend 2020 to omit the income and include it in 2021 instead, but the $10,000 exemption is gone and she will have to pay tax on the full amount plus kiddie tax because it's passive.  What would you do?

[KrisD15]

She would need to amend the 2020 return and subtract the unemployment, but it should not change her tax liability, so there would be no reason to file the 1040X. 

If she received unemployment in 2021, that would need to be claimed in 2021, and yes, subject her to Kiddie Tax. 

If the 1099-G is for 2021, it will need to be reported on the 2021 Tax Year return.