Several taxpayers will need to hold off on filing their tax returns a bit longer this year. Taxpayers who received Michigan unemployment benefits in 2021 are still waiting on Form 1099-G that reports these benefits. The Michigan Unemployment Insurance Agency (UIA) recently announced that 1099-G forms will not be ready until the end of February this year. Typically, these forms are due to taxpayers by the end of January, and they were ready as early as January 9 last year. This year UIA stated they need more time to account for overpayments, fraudulent claims, and waiver activity so that they can provide accurate information.
1099-G forms will be available through the MiWAM website by the end of February if a claimant requested to receive electronic delivery of this form. All other 1099-G forms will be mailed out in the same time frame. A taxpayer is still able to request electronic delivery of this form by logging onto their MiWAM account and changing the preferred delivery method. This can be found under the “Account Alerts” section. It is important to remember that this form is needed to prepare your tax return. Filing your return without this form or using estimated amounts will likely cause further complications and delays.
One other notable change for 2021 is that unemployment recipients will no longer be receiving potential tax breaks on their benefits. Last year, the first $10,200 of 2020 unemployment benefits were tax-free for taxpayers under certain AGI limits. This is not the case for 2021. 2021 benefits will be fully taxable, and it is not expected that there will be another retroactive change.
Please contact us if you have any questions or would like our assistance!