Alabama Unemployment

February 26th, 2007 Posted by Amelia

Everyone who collected Alabama unemployment during 2006 should have received a 1099 form by now. In the first month of this year, 1099 statements were sent out to anyone who received Alabama unemployment benefits during 2006.  The 1099 is, in a sense, the W-2 of a non-employee. 

 If you are considered an employee of a company, you are issued a W-2 after the close of each year.  Your taxes are withheld from your take-home pay, and that is recorded on your pay-stub and the W-2.  The 1099 records income such as unemployment benefits and any deductions that were made.  Deductions include child support and any other court ordered payments.

Did you know that your Alabama unemployment benefits need to be reported on your taxes?  If you did not elect to have federal or state taxes withheld from your benefit, like most people, you will have to pay taxes on the total amount received.  The 1099 reminds individuals of the exact amount paid to them, and taxes withheld if any.  If you did collect money for unemployment, you should have this form by now.  The Alabama Dept of Labor will help you promptly if you did not receive the 1099 for 2006 or previous years.

Other individuals who may have gotten a 1099 may not have received unemployment benefits.  This is not an error.  The statement may have come from a company that hired that individual for a temporary, project based, period, and did not consider them a regular employee.  Although not all employers provide this form when hiring short-term workers, many do.  The form is a specific record of income for independent contractors or freelancers.  It is in fact the same form distributed to those who used their unemployment benefits.  Typically, taxes are not withheld in such situations and individuals are liable for any taxes due on the income.

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