labor lawAdivision of labor law center

Montana unemployment benefits are considered taxable income, according to the Montana Department of Labor. As such, the benefit payments are documented using a statement of unemployment earnings, commonly referred to as Form 1099.

Anyone receiving unemployment benefits from the state of Montana in 2006 should have received an accurate 1099 by the middle of February. Most 1099s are received during the first week of February. If not, you will need to contact the nearest branch of the Montana Department of Labor. The staff there will assist you in getting a duplicate. They will need to verify your current mailing address so they can successfully mail you a duplicate 1099 form. If you owe back taxes or need to file income tax returns for earning or benefits paid prior to 2006, they will gladly help you with this, too. Form 1099 must be filed along with your state and federal income tax returns.

Both federal and Montana state income taxes are assessed when unemployment benefits are paid. The recipient can choose to have the taxes withheld from each unemployment check or can pay it all when income tax returns are filed. Montana paid thousands of unemployment claims in 2006 and almost half of them had federal taxes withheld. In fact, more than $6 million dollars in taxes were withheld from these claims.

“Unemployment Insurance benefits not only help workers get by during times of unemployment, it helps stimulate our Montana economy.” says an unnamed official at the Department of Labor. The official adds, “With more than $68 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 unemployment insurance claim payments, payments were made to Montana workers for Trade/Readjustment Assistance and various extensions to unemployment benefits due to special circumstances. These payments totaled almost $172 million in 2006.