(WTNH) — Seven billion dollars has been put into the pockets of Connecticut residents struggling during the COVID-19 pandemic. Six federal programs and one state program. More than one million applications all being handled by the State Department of Labor (DOL). With all that money moving around, many News 8 viewers have reported they have been running into issues. News 8 spoke with DOL to get answers to some of your questions.
Deputy Commissioner Daryle Dudzinski at the State Dept. of Labor tells News 8, “This pandemic has created and caused an overwhelming number of claims and there are delays.”
News 8 had questions about unemployment overpayments, now a tax liability for residents like Sherri Fiordelisi from Branford and Kathleen Henderson of Milford.
“This is a national problem,” said Deputy Commissioner Dudzinski.
Why did people recently get 1099-g tax forms which show zero payment when they have documentation that says otherwise?
News 8’s Chief Political Correspondent Jodi Latina remarked on behalf of viewers, “Eight months go by and the 1099 reflects she still owes the money. That’s a long time.”
“Our systems are forty years old and just not built for the volume of claims we are experiencing,” answered Dudzinski.
The state has hired more staff. Software systems are getting upgraded. An audit of claims is being done but results may not be known for a year.
What is the guidance from the IRS?
“They are telling filers to file according to their income not according to the 1099 and save all of their documentation,” said Dudzinski.
IRS guidance includes overpayments resulting from any number of situations including an employee receiving back pay, an appeal on the claim, or an error on the application.
Some taxpayers find that a 2020 repayment has not been applied to their account and the 1099G reflects a balance owed as taxable income. In this case, CTDOL is urging claimants to follow IRS guidance: “Repayment of unemployment compensation” pg. 27:
If you received an overpayment of unemployment compensation in 2020 and you repaid any of it in 2020, subtract the amount you repaid from the total amount you received.”
Repayments may not have been applied in 2020 due to any number of circumstances including when the payment was received, if it had supporting account information, and agency pandemic delays in applying overpayments to accounts.
Meantime, at least one lawmaker, State Representative Vin Candelora, the Republican House Minority Leader is asking the state to create a victim’s fund using CARES Act money so those harmed can hire an accountant.
“If there are people who have been harmed by the inability of these credits being processed in a timely fashion, then the state of Connecticut should make them whole,” said State Rep. Candelora.
Deputy Commissioner Daryle Dudzinski adds, “We’re going to continue to improve and do our best to serve our Connecticut customers.”
Why not outsource the avalanche of work to a more technically savvy private company? CTDOL tells News 8 that is prohibited by federal law because of the sensitive information being handled.
CTDOL Commissioner Kurt Westby tells News 8 “The agency has sent out more than 600,000 1099G forms to claimants and, as expected, there are questions—especially since many pandemic filers are new to the unemployment system. In addition, the six federal relief programs we implemented throughout the past year are also new to claimants. Just last week the IRS issued guidance for some people who have received 1099G forms to ensure they are only paying taxes on their actual income; we urge claimants to check our webpage for guidance.”
The State Dept. of Labor says anyone with general questions about the 1099 forms – like why they got it and what to – do should log onto their homepage. They have also put together a public service announcement ‘What is the 1099G Tax Form?’
For more information on unemployment and claims: https://portal.ct.gov/dolui
News 8’s Jodi Latina will have more this weekend on “This Week with Dennis House” Sunday morning at 10 on News 8!