Unemployment

[GMSchafer]

My wife filed for unemployment in 2020, but there was a fraud issue on her account so her claim wasn't paid until it was resolved in 2021.  We received a 2021 1099-G.  My question is this should have been 2020 income when unemployment wasn't taxed, but now since it is 2021 we have to pay income taxes.  Do I have any resolution?

[DanP0428]

It is unfair, but no exceptions have been made for people in that situation.  As the law is now, she will have to pay taxes since it was not received in 2020.  

[LeonardS]

As @DanP0428 posted you will have to include the unemployment tax on your 2021 tax return as that is when you received the unemployment payments.

If you live in any of these states Alabama, California, Montana, New Jersey, Pennsylvania, and Virginia you will not be taxed on your unemployment benefits.