There are two types of people required to use 1099 statements when they file their income tax returns. These two types of people are independent contractors and unemployment benefit recipients from any state, including Kentucky.
If you received unemployment benefits in 2006, you should have received a Kentucky 1099 form in January 2007. If not, contact the Kentucky Dept. of Labor, and you will receive a duplicate. Everyone must have a 1099 form to report unearned income.
Independent contractors also use 1099 forms. Most don’t pay taxes on their income when they receive it. Even if they don’t pay taxes right away, they’re still required by law to pay federal and state taxes. In order to pay their taxes, independent contractors need some sort of record of their income. This is what the 1099 statement does. If their earnings are high enough, independent contractors are required to pay quarterly estimated income tax payments.
All Kentucky unemployment benefit recipients also require 1099 forms. There are a few recipients who had their taxes withheld from their unemployment benefit checks. These people are still required to send 1099 statements with their tax returns. After all, you have no other way of proving your tax payments.
The Kentucky unemployment office issued 1099 statements in January to all people who received unemployment benefits in 2006. Each of these 1099 statements has information about benefit earnings and benefit deductions. Benefit deductions include such payments as court ordered restitution and court ordered child support. This information is also provided by the state to the Kentucky Dept. of Revenue and the IRS.
Individuals who need or want for their own records 1099s from previous years can receive those as well. To get 1099s from previous years the individual simply needs to contact the nearest Kentucky Dept. of Labor office and make the request.
We’ve covered the unemployment insurance benefits system quite a bit here at this blog, so I would expect all of my loyal readers to have a good feel for how the system works. But what of all of my new, soon to be loyal, readers out there? Should I go into a quick discussion and explanation of the unemployment insurance benefits system, or get right to the point—which is the new contribution rates in the state of Kentucky that were just announced? I can do both.
Let’s start with the new Kentucky unemployment insurance benefits rates. For the year 2007, the new unemployment rates for the state will be the rates listed in rate schedule C. These are to be a rates range of .50 percent to 2.9 percent of those employers with positive balances. For employers with a negative balance, those rates will be from 7 percent to 9.5 percent. New employers in the state of Kentucky for the year 2007 can expect to pay a contribution rate of 2.7 percent.
What is that contribution rate? Well, that’s the percentage of your payroll that you must pay quarterly into the unemployment insurance system in Kentucky. You see, employers pay this unemployment insurance tax into the system, and then the system doles out the money in proportionate amounts to the laid off employees of the state that get the money until they find a new job or are rehired by their old employers.
The difference between the positive balance and the negative balance, by the way, is for established employees that have a record with the unemployment insurance system. Those employers who have paid their taxes on time and who pay more taxes than they have laid off employees collecting benefits—hence, positive balance—get a better tax rate. Those employers who either do not pay their taxes on time, or who lay off more workers who collect more benefits than the employer paid into the system, get worse rates.
Although the Kentucky unemployment rate increased statewide during November, the jobless rate decreased in 107 Kentucky counties, compared to one year ago. The November unemployment figures are the latest available.
According to Kentucky Department of Labor analysts in Frankfort, the Kentucky unemployment rate fell in 107 counties compared to the unemployment rate one year ago. The unemployment rate in 11 counties rose, while the rate remained the same in two counties.
Some sectors did show an increase in employment. According to the Kentucky Dept. of Labor’s Chief Market Analyst, Carlos Cracraft. “The manufacturing sector rebounded somewhat in November but this is only the fourth month this year that we have seen employment gains in this segment,” Cracraft said.
A number of Kentucky counties had unemployment rates below the national average. The state’s lowest unemployment rate was in Woodford County, with a jobless rate of just 3.7 percent. Other counties with low rates include Boone County with 3.8 percent unemployment. Fayette, Gallatin, Jessamine and Warren counties all had 4 percent unemployment. Henderson and Scott counties had 4.1 percent unemployment each while Madison County had 4.2 percent unemployment. The jobless rate in Grant, Kenton and Webster counties was just 4.3 percent each.
“The educational and health services sector has added employment in eight of the 11 months in 2006 so far. Approximately two-thirds of those 4,800 new jobs over the year have been in the health care industries,” Cracraft said.
The highest unemployment rate in the state was reported in Jackson County, with 11.7 percent unemployment, followed by Clay County with 10.1 percent unemployment. McCreary County, Woolfe County, Leslie County, Magoffin County, Harlan County, Muhlenberg County, Owsley County and Fulton County all had unemployment rates between 7.7 percent and 9.7 percent.
Kentucky unemployment statistics, like the national figures, are based on estimates and are compiled to measure trends rather than to actually count the number of people working. Civilian labor force statistics include non-military workers and unemployed Kentuckians who are actively seeking work. They do not include unemployed Kentuckians who have not looked for employment within the past four weeks.
According to the Department Labor in Frankfort, the most recent Kentucky unemployment figures show a slight increase. Kentucky’s seasonally adjusted unemployment rate rose from 5.2 percent in October 2006 to 5.5 percent in November 2006, according to the Office of Employment and Training, an agency of the Education Cabinet. The November numbers are the most recent available.
Still, there is some good news in Kentucky unemployment. The November 2006 jobless rate of 5.2 percent was below November 2005’s rate of 6.4 percent. The rate showed a decline of 1.2 percent, compared to a slight increase in the nationwide rate. The U.S. seasonally adjusted jobless rate increased from 4.4 percent in October 2006 to 4.5 percent in November 2006, according to the U.S. Department of Labor.
“Although Kentucky’s unemployment rate went up in November, it has remained below 6 percent in six of the past seven months. Kentucky was one of 37 states that had a lower unemployment rate in November 2006 than a year ago in November,” said Carlos Cracraft, the department’s chief labor market analyst. “Kentucky was one of 21 states plus the District of Columbia that reported unemployment rates above the U.S. average of 4.5 percent in November 2006.”
Five of 11 major sectors reported employment increases in November, while five decreased, and one remained the same, according to Cracraft. The decrease of 300 jobs brought Kentucky’s non-farm employment to a seasonally adjusted total of more than 1.8 million.
According to the seasonally adjusted employment data, Kentucky’s manufacturing sector recorded 500 more jobs in November 2006 than in the prior month. Compared to one year ago, the sector had 7,300 fewer positions in November 2006.
“Kentucky’s non-farm employment has increased in 12 of the past 16 months, and has risen by 10,600 since November 2005. Altogether, 49 states and the District of Columbia recorded over-the-year non-farm payroll employment increases in November 2006, with Michigan as the only exception,” Cracraft said.
Unemployed workers in Kentucky can file an unemployment Insurance claim using the Internet any time day or night. If they have all the required information, which is listed on Kentucky Unemployment Insurance posters, they can file a claim at any location with Internet access. They may also file by phone.
Regardless of how an Unemployment Insurance Claim is filed, employers need to recognize that eligibility for benefits is determined based on past wages, reason for job separation, and availability and job search requirements listed on Kentucky Employment Insurance Posters. Therefore it is imperative to keep good records.
Claimants must supply their Social Security number, complete mailing address, the exact month, day and year that employment began and terminated for each for each of your recent (for the past 18 months) employers along with the employers’ business names, complete mailing addresses, and phone numbers.
Kentucky Unemployment Insurance posters also say an unemployed worker must be “available for suitable full-time work and making such reasonable effort to obtain work as might be expected of a prudent person under like circumstances” while claiming be able to work, register for work with the Office of Employment and Training (OET), respond in a timely manner when contacted about job openings, accept referrals from OET to suitable employment, report for job interviews to which referred, report for follow-up contacts with OET as instructed, and participate in referrals to other reemployment services and case management. In addition the unemployed worker must seek employment on his own, and accept suitable employment when offered.
Failure to meet the above requirements may result in being disqualified from receiving benefits. Be sure that employees receiving these benefits continue to follow the rules set forth by OET and check with the OET regularly to be sure that you are not still paying for a disqualified employee. The Kentucky Unemployment Insurance posters give detailed descriptions of all requirements for any unemployment insurance.