SAVANNAH, Ga. (WTOC) - The Georgia Department of Labor has paid more than $16.8 billion in benefits to unemployed Georgians since the beginning of the pandemic.
That money isn’t free.
Unemployment is considered taxable income, meaning you must report it on federal and state tax returns.
If you received unemployment benefits in 2020, start looking out for your 1099-G form. According to the Georgia Department of Labor, that should be going out before the end of the month. If you would like to receive it electronically, you must sign up at this link by midnight on Thursday, Jan. 21.
Depending on what your form says, you could be owing Uncle Sam or getting a smaller refund this year.
Georgia’s Department of Revenue and tax preparation services are gearing up for tax season. Hundreds of thousands of unemployed Georgians are expected to file, with some who have chosen not to withhold taxes from their check.
“If they had taxes taken out, they shouldn’t get a big surprise. If they didn’t opt to have those taxes withdrawn, there will be a tax liability,” Georgia Department of Revenue Commissioner David Curry said.
Curry says there’s good news though - majority of unemployment recipients chose to have taxes withheld.
But for those who didn’t, they could face a tax bill they might not be able to afford, as money continues to be tight for some.
Savannah tax preparer Georgia Benton says there may be a solution that won’t hurt your wallet.
“Maybe they have certain credits, you know,” Benton said, “they may be allowed to have that and will not cause them to pay taxes on it.”
Tax credits include, but are not limited to, education, homeowner, childcare. That info can be found on the IRS’s website.
Along with expenses you could possibly deduct from your previous income before figuring out how much taxes you owe.
Benton encourages people to not file their taxes blindly, especially if they’re doing it on their own.
“If you’re guessing while you fill it out, you could wind up with a large liability,” Benton said.
Curry says call the agency if you have questions.
“Every situation is a little bit different. Ask, we’re very responsive,” Curry said.
While the filing process will look the same as last year, both the Department of Revenue and tax preparers expect an influx of unemployed individuals catching up on filing their taxes from previous years in order to receive a stimulus payment.
Even more of a reason, Benton says, to file your taxes early. You must have a tax return filed to receive a stimulus, if eligible. “If for some reason, another stimulus comes up, then they will know exactly where to send it,” Benton said.
The IRS did delay the tax filing deadline last year, due to the pandemic. Curry does not see that happening this tax season. That means your taxes must be filed by April 15.
If you are eligible for a tax refund, Curry says you should receive that two weeks after you file. However, if you wait to file until late March, you could be waiting a little longer for that refund.