AG Wants Congress To Create Safe Tax Harbor For Unemployment Fraud Victims

Jan 22, 2021

1.7 million 1099-G tax forms will be mailed this month to Ohioans who got unemployment benefits – and to some that didn’t but are the victims of fraudulent claims. And Ohio's attorney general is concerned about that.

AG Dave Yost asks in a letter to Ohio’s Congressional delegation that Congress suspend collection of taxes, fees and interest while claims are being investigated.

“That they hold that in abeyance basically, that they take those unemployment benefits out of the 2020 calculation – and don’t charge any interest, don’t charge any penalty," Yost said.

"And if eventually we see that they actually did get those benefits, then that can be added in at a later time. But at least for now, that we don’t put people in a position that they have to pay taxes on money that they never received.” 

In the federal pandemic assistance program for people who don’t normally qualify for unemployment, half the claims have been flagged as possibly fraudulent. Even Gov. Mike DeWine and Lt. Gov. Jon Husted said they’ve been notified that claims were made in their names.

And it's not the first time fraud has hit the state's unemployment compensation system. Last summer, thousands of claims weren't paid while the state investigated a quarter of a million possible fraudulent claims, putting a strain on the finances of those who were waiting for those benefits.