Mysterious 1099 tax form? You could be a victim of identity theft

It’s W-2 and 1099 season when companies send you tax returns for what you earned last year.

But check these statements carefully. Some people receive 1099 forms indicating that they have earned unemployment benefits when they have never filed for unemployment.

Joe McFarland struggles to understand what appears in his family’s mail.

Her long-retired mother received a Form 1099 claiming she received thousands of dollars in unemployment last year from her state.

“She got 1099 out of unemployment,” McFarland said. “But she’s 87 and hasn’t worked in years.”

But as if that weren’t enough, he says, “yesterday my wife got one too.”

This shows that she received $11,000 in unemployment benefits in 2020.

The only problem: his wife was an employee and never asked for help.

“No, she never applied, never won anything,” he said.

What do these forms mean?

Unfortunately, these forms are not fake in most cases. And they are certainly no joke.

According to state unemployment officials, if 1099 includes your name, address, and the last four digits of your home number, it likely means someone filed for unemployment under your name.

Thomas Betti, spokesman for Ohio Employment and Family Services, says there’s a good chance your Social Security number was stolen in a data breach.

“They are probably victims of identity theft,” he said.

And it’s not just in one state. Turns out, people all over the country are getting 1099 forms from every state.

Betti says if you receive one, you should immediately go to your state’s unemployment website and file a fraud report.

The state can then send a corrected Form 1099 to the IRS that shows you did not receive benefits. “We will send them a corrected 1099 form showing zero,” Betti said.

In the meantime, Betti says, you shouldn’t report it on your 1040 tax form or the IRS will assume you received the money.

McFarland thinks it’s outrageous that someone can apply for benefits under your name. But they can and do.

Finally, this is a scam where you don’t want to just rip or shred the form because a copy is on its way to the IRS.

And unless you get it fixed, the IRS will want you to pay taxes on the money that went to a scammer.

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