Delayed 2020 Unemployment payment received in 2021. Will I be taxed for this delayed payment?

[Uni1074]

I applied for unemployment in May 2020 and turned in all verification requested. I wrote DETR letters, emails and faxed them asking when my claim would be reviewed for a decision. I finally received a decision and payment for 2020 in January or February of 2021. In 2020 $10,200 of the unemployment insurance payment was to be exempt from being taxed. I received over $12,000 in 2021 but it was all based on May to September 2020. Will I now be taxed on that full amount of $12,000 because DETR did not pay this to me until 2021? Or is there an exception because of the delay in payment that was not my fault? Thank you. 

[TeresaM]

When you receive unemployment benefits from a state, they report that income to the IRS with a 1099-G for a specific year. (1099-G forms are for payments from the state governments and can also be for other grants and other payments, so they can appear for entry in several places in a tax return.)
Did they send you a 1099-G with the year 2020 for those benefits which were received late?
Or, did they include the amount in a 1099-G for 2021, which may be available on the state website now but should be available after January 31st?

 

[Uni1074]

I haven’t received anything from them as of yet. I also received unemployment benefits for the 2021 for April-July 2021. A little over $8,000. So I am concerned if they will just send me one tax document for both years combined or will it be separate. I checked my account online with DETR and nothing has been posted as of yet. If they do report the 2020 amount, will I have to amend my taxes for 2020 (completed in 2021)? Thank you 

[Vanessa A]

No, you will not have to amend your 2020 return.  If the payment was not received until 2021, you will include it on your 2021 income tax return even though the payment was for 2020.  

[Uni1074]

I received the 1099 G yesterday and it is for 2021 only but they combined the benefits I received in 2021, for that year, plus the benefits paid late to me (in 2021) for 2020.  Over $24,000 (the additional $600, $300 plus my regular unemployment benefits). I entered this in my turbo tax account and there is nothing listed or questions asking if the amount includes prior years. The system is just counting the full amount as income for 2021. I owe taxes now. I always used to receive a refund. I think it’s unfair that I cannot utilize that exception for up to $10,200 just because the department paid out my claim late. I don’t know what to do.

[LenaH]

Yes, that is correct. If you received the unemployment payments in 2021 (whether or not they were considered late), you will owe taxes for the payments in 2021. 

@Uni1074