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California Unemployment

February 26th, 2007 Posted by Amelia

Many workers receiving California unemployment benefits are not aware that their income from this program is taxable.

California unemployment recipients must file both state and federal income tax returns reporting these benefits as income. For purposes of documenting this income and the taxes generated by it, California’s Department of Labor issues a Form 1099 to each worker receiving benefits. This form must accompany the worker’s state and federal income tax returns.

In late January, the California Department of Labor mailed a 1099 to each worker who received unemployment compensation during 2006. All workers should have received their 1099 earning statements by the middle of February. In a situation where the form 1099 wasn’t received on time, the worker is urged to contact his or her nearest branch of the state’s Department of Labor for assistance in securing a duplicate 1099. Staff members at these branch offices are happy to help California workers secure an accurate 1099. Address verification is required to make sure the duplicate 1099 generated is received as soon as possible. Assistance is available for anyone needing a duplicate 1099 for 2006 or any year before that.

State and federal income taxes generated by unemployment benefit payments added up to more than $12 million in California for 2006. The economic value to the state’s economy is remarkable. Says an unnamed official at the Department of Labor, “Unemployment Insurance benefits not only help workers get by during times of unemployment, it helps stimulate our California economy.” The official adds, “With more than $222 million in benefits going out during the year, our state has given significant assistance to both workers and employers in 2006.”

California assists workers during times of need in several ways. The standard unemployment benefit payments are sometimes extended due to extenuating circumstances. Other workers receive financial aid through the Trade/Readjustment Assistance program.