Monday, January 20, 2014
OH NO THEY DIDN'T!
Oi vey – by accident I came across this bad news from the NJ Department of Labor and Workforce Development website over the week-end (highlights are mine) -
“Tax Form 1099-G ‘Certain Government Payments’ will no longer be mailed to recipients of Unemployment Insurance benefits in New Jersey. You will be able to obtain this information by using our online 1099-G Income Tax Statement application.
Form 1099-G reports the total taxable unemployment compensation paid to any individual who received New Jersey Unemployment Insurance (UI) benefits for a specific calendar year.
The online 1099-G application will be available in late January 2014 and it will provide you with your New Jersey Department of Labor and Workforce Development (LWD) 1099-G Income Tax Statement, which you can view and print through the online application. LWD will update our website when this information becomes available.
To use the online 1099-G application, go to the Unemployment Insurance page of the LWD website at www.njuifile.net. Once you have signed into the application, click on View/Print 1099-G Tax Statement and then simply click continue after reviewing the instructions.
You will need your online user ID, password and Personal Identification Number (PIN) to access your tax information. Before trying to access your tax information, you must have a PIN. If you cannot remember your PIN or are having difficulty with it, please contact one of our Regional Call Centers for assistance.
If you received Disability Benefits During Unemployment (DDU) or Paid Family Leave Insurance (FLI) benefits during the tax year 2013, you will still receive your tax information on form 1099-G by mail. If you also received unemployment benefits during that same period, you will have to visit the website to obtain the 1099dG tax information.”
What brain decided on this? A very bad idea!
NJ stopped mailing out 1099-Gs for state income tax refunds a few years ago. But this is not a problem. It is easy to see if a client should have received a state tax refund by simply looking at the prior year return. And it is easy to access these 1099-G forms online for verification with basic taxpayer information. It is a different story with unemployment benefits.
I will now have to ask every single client if they received NJ unemployment benefits at any time in 2013, and tell those who did to go to www.njuifile.net to download the form, or ask if they still have, or know, their user ID, password and PIN so I can access the form ourselves.
More work for me, and my fellow NJ tax pros, and more wasted time when there is no time to spare!
This is going to cause a lot of agita for the IRS. Many taxpayers erroneously believe that you only have to report income if you get a Form 1099 – so there is going to be a lot of non-reporting of unemployment benefits by NJ taxpayers on 2013 Form 1040s and 1040As!
I only learned it by accident. It was not reported by the NJDOT speakers at the recent NJ-NATP state tax update. How will taxpayers know that they must go online to get their 1099-G? Is the NJDOLAWD going to mail a notice to all unemployment recipients? And if so, why not just mail out the 1099-Gs?
I predict there will be tons of CP-2000 notices sent to NJ taxpayers in 2014!
NJ does not tax unemployment benefits. So this does not affect the NJ-1040. It is obvious that the cafones in Trenton do not give the proverbial tinker’s damn about the substantial inconvenience this decision will cause NJ unemployment recipients, NJ tax preparers, and the IRS.
Regular visitors to TWTP probably know by now that I do not suffer fools well – hence my disgust with the idiots in Congress. It seems that Washington is not the only city full of idiots – there are apparently a lot in Trenton as well!