Income tax time is rapidly approaching and anyone who received unemployment in 2006 needs to be aware that Minnesota unemployment benefits are taxed just the same as many other forms of income.
Each year, the Minnesota Department of Labor issues a Form 1099 to each worker receiving benefits in 2006. These forms are mailed during the last week of January with the expectation that all workers will receive them no later than the middle of February. If you haven’t yet received your 2007 Minnesota 1099 form, this is the time to act.
Anyone not receiving his or her 2006 1099 by mid-February must contact the nearest branch of the Minnesota Department of Labor for assistance in getting a duplicate. Address verification will be required at that time. The 1099 must be filed along with the worker’s state and federal income tax returns.
Taxes generated by unemployment claims in Minnesota for 2006 exceeded $6 million. Workers can choose to have income taxes withheld each time a benefit check is issued or the tax can be paid at one time at the end of the year when the worker files his or her state and federal income tax return. About half the unemployment benefit payments went to workers choosing to have their taxes withheld from each paycheck.
An unnamed official at the Dept. of Labor said recently, “Unemployment Insurance benefits not only help workers get by during times of unemployment, it helps stimulate our Minnesota economy.” The official also said, “With more than $111 million in benefits going out during the year, our state has given significant assistance to both workers and employers in 2006.”
In addition to regular Minnesota Unemployment Insurance benefits, workers received assistance from the Trade/Readjustment Assistance program and from extended unemployment benefits paid due to special circumstances. The total payout of unemployment benefits to Minnesota workers for 2006 exceeded $171 million.
Between 2,500 and 4,000 automotive workers in Minnesota and other states can take advantage of free training programs under a new Minnesota unemployment grant. States will be eligible for grants of $1.5 million from the U.S. Department of Labor, provided they come up with $1.5 million in matching funds.
The Career Advancement Account (CAA) is a newly announced project of the state of Minnesota in collaboration with the U.S. Dept. of Labor. Laid-off Minnesota autoworkers will get a much-needed assist from the federal government under the new program announced recently.
“Education is America’s great equalizer, and Career Advancement Accounts are like Pell Grants for workers — opening opportunities to increase their skills and equipping them for the competitive global economy,” said Assistant Secretary of Labor for Employment and Training Emily Stover DeRocco.
There will be high demand by 2014 for skilled labor in a number of industries, including healthcare, advanced manufacturing, biotechnology, energy, and transportation According to a number of surveys, while the demand for autoworkers in the U.S. continues to decline, the need for other skilled workers increases. In the healthcare industry alone, eight of the 20 fastest-growing jobs can be found. CAAs will allow workers to invest in their future by gaining the training to secure good jobs.
The money is a grant, not a loan, and does not have to be repaid. Under the CAA program, unemployed autoworkers will be eligible for accounts worth $3,000, for any type of training that they like.
Even better, the grants are renewable for one year, meaning the workers are eligible for a total of $6,000. According to some estimates, the widespread implementation of CAAs would more than triple the number of American workers who could access post-secondary education and training. Career Advancement Accounts are part of a broader effort to redirect the billions of dollars spent nationwide on worker training.