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U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEUMI

ISSUE DATE

August 14, 1990

RESCISSIONS

 

EXPIRATION DATE

August 31, 1991

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 39-90

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

DONALD J. KULICK
Administrator
for Regional Management

 

SUBJECT

:

Taxation of Unemployment Insurance Benefits, IRS Form 1099-G, Statement for Recipients of Certain Government Payments

 

  1. Purpose. To transmit revised Form 1099-G to be used by State employment security agencies (SESAs) when notifying claimants of unemployment insurance (UI) benefits paid during calendar year 1990.

  2. Reference. Public Law 99-514, The Tax Reform Act of 1986, and UIPL 52-89 dated September 8, 1989

  3. Background. The Internal Revenue Service (IRS) has provided the Unemployment Insurance Service with copies of the revised Form 1099-G, Statement for Recipients of Certain Government Payments., to be used by all SESAs when notifying claimants of unemployment insurance benefits paid to them during calendar year 1990.

  4. Procedure. Substitute Forms 109-9-G (Statements) may be provided to claimants if they contain substantially similar language to the official form. Such statements should meet the requirements contained in Internal Revenue Service Publication 1179 - Specifications for Paper Document Reporting, and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498 and W-2G for 1990. IRS Publication 1179 must be obtained directly from the Internal Service.

    1. Data blocks 2 through 7 may either be left blank or used by SESAs for information of their choice, such as overpayments and recoveries. Any changes or additions must be fully explained on page 4 of Form 1099-G.

    2. If the total amount of UI benefits paid to a claimant during the year is less than $10.00, a State is not required to prepare a Form 1099-G for that claimant but has the option to do so.

    3. SESAs are to enter on the magnetic tape of 1099-G information which is sent to the IRS the total of UI payments to each claimant without adjustment.

    4. Copy B (for recipient) of the substitute forms must contain the following statement:

      "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported."

      The IRS strongly encourages a quality review of 1099-G data by SESAs before mailing to prevent erroneous notices being mailed to claimants.

  5. Recommendation. It is recommended that SESAs use continuous form speedi-mailer packets to provide 1099-G information to claimants. Mailer packets must comply with Postal Service size requirements to assure the lowest rate for mailing.

  6. Transmittal of 1099-G Information to IRS. All information returns filed on magnetic tape and related correspondence are to be forwarded to:

    Magnetic Media Reporting
    Internal Revenue Service
    National Computer Center
    P.O. Box 1359
    Martinsburg, West Virginia 25401-1359

  7. Action Required. SESAs are to procure their own continuous 1099-G Forms or statements in lieu of Form 1099-G, in time for computer preparation, mailing, and delivery to claimants by January 31, 1991. SESAs are to follow any instructions which may be provided by the IRS, or required in IRS Publication 1179, when preparing Form 1099-G, or statements in lieu of 1099-G, and forwarding magnetic tape information to the National Computer Center.

  8. Inquiries. Direct questions to the appropriate Regional Office.

  9. Attachment. Facsimile of 1099-G Form packet for 1990.