Unemployment tax mistake causes headaches for Ohio taxpayers

COLUMBUS, Ohio (WCMH) -- NBC4 Investigates is looking into confusion for thousands of Ohio taxpayers.

An issue at the Ohio Department of Job and Family Services (ODJFS) has forced some people to file income taxes after the April 18 deadline.

The agency was late sending 1099-G forms, required for recipients of unemployment benefits, to roughly 20,000 people. The forms should be sent out by the state by the end of January.

An ODJFS spokesperson confirmed the issue was identified in March and corrected within a week or two.

Still, not everyone affected by the issue received their form on time.

When Shuvonna Waters filed for unemployment benefits in 2021, it was not a smooth process.

“Someone had hacked my account and changed the banking routing information that was on the unemployment account, so the payments were being sent somewhere else and not to me,” Waters said.

Waters called ODJFS and was directed to file a claim using the agency’s fraud portal. From there, Waters confirmed her identity and started collecting benefits.

However, when it came time to pay taxes on those benefits, she said she couldn't file because she never received her 1099-G. She called the agency again.

"I was told that there is a list and there were many people that did not receive a 1099-G. They’re not absolutely sure why it wasn’t received,” Waters recalled.

The ODJFS spokesperson said the agency is still unsure why so many 1099-G forms had originally not been sent.

“I followed up again," Waters said. "I was essentially told, ‘Hey, we’re working on it. All you can do is wait.’”

Then on April 18, the deadline to file taxes, Waters received an email from ODJFS at 4:20 p.m., informing her that her 1099-G would be available online in 24 to 48 hours.

“I’m looking to see if (ODJFS) is ... going to work with the IRS to make sure at least I don’t have to pay late penalties for something I couldn’t control," Waters said.

The ODJFS spokesperson said Waters’ issue likely stemmed from her fraud case. He explained that the agency cross-referenced the list of 1099-G's that had not gone out with the list of people who had filed a claim using the fraud portal until it could be determined that the fraud victims also had legitimate unemployment claims.

“But how does that fall on me, and I’m the person now being accountable for paying late penalties for taxes?” Waters asked.

In an email, a spokesperson for the Ohio Department of Taxation told NBC4 Investigates, “Late filing and late payment penalty are discretionary, so these penalties may be reduced or waived entirely for good cause. Taxpayers who discover errors in their original return (e.g. failed to report income from unemployment benefits received), should file an amended return as soon as possible and pay the additional tax and interest due.”

An IRS spokesman also recommended filing an amended return once the proper information arrives.

"Anyone with questions regarding their 1099-G can go to unemployment.ohio.gov/employee and click on 'submit a question.' There are options for both corrected 1099s and duplicate 1099s. As we have issued all missing and corrected 1099s that we were made aware of prior to April 18, the turnaround time on new requests should be very quick. Each unemployment claim is unique, so there is always the possibility of an unforeseen issue, but we will work quickly to address those situations," wrote the ODJFS spokesperson.

"Anyone who has not yet filed their taxes should consult with a tax professional on the appropriate steps."