Paying taxes is forever, even when you are unemployed. If you thought the only silver lining on unemployment is not to have to worry about preparing your tax return, think again. All unemployment benefits are taxable and must be declared in your tax return to your state and the Internal Revenue Service.

This is not news to most of our readers. However, some have asked about how to go about requesting forms and the documents they need to fill in their tax returns. Take for instance this question from Daniel Thomas: “How would I go about getting a copy of a form 1099-G from PA Unemployment?”. Excellent question Daniel. In fact there are many tax-related questions we have received from our readers lately so we have prepared a special article on unemployment and taxes. I know, combining taxes with unemployment regulations is probably the most dull theme on the web, but when you are on unemployment benefits and every dollar counts it is important to know where you stand with the taxman. Click here for a direct link to the Pennsylvania Department of Labor and Industry or read below for a summary of the subject of taxes and your Pennsylvania benefits.

1. How do I obtain a Form UC-1099G?

Click to access the Taxation of UC Benefits page and follow instructions.

2. What if I receive a Form UC-1099G with an incorrect amount in "Total Payment" or "Tax Withheld" areas of the form?

For income tax purposes, UC benefits are reported in the calendar year in which they are paid, regardless of when the application or claim for benefits was filed.

If you believe the "Total Payment" or "Tax Withheld" on Form UC-1099G is incorrect, please contact a UC Service Center 7 a.m. to 8:30 p.m. Monday through Friday and Sundays 7 a.m. to 2:30 p.m. or the Claims Information Center at (717) 783-3140, Monday through Friday, 7:30 a.m. to 4:30 p.m. All payments made to you and amounts withheld will be recalculated and compared to the amount on your Form UC-1099G. If the amount is incorrect, an amended Form UC-1099G will be issued.

3. What happens if UC benefit checks were returned and re-deposited into my account after the original Form UC-1099G was mailed to me?

An amended Form UC-1099G must be issued. You may contact a UC Service Center 7 a.m. to 8:30 p.m. Monday through Friday and Sundays 7 a.m. to 2:30 p.m., or the Claims Information Center at (717) 783-3140, Monday through Friday, 7:30 a.m. to 4:30 p.m. Your social security number and mailing address will be verified before an amended Form UC-1099G will be issued.

4. What if I receive a Form UC-1099G after I have filed my federal income tax return with the IRS?

Any questions concerning any adjustments that need to be made on your federal income tax return should be directed to the IRS at 1-800-829-1040.

5. What if I received an overpayment of benefits in one year and I repaid any of it in the same or subsequent calendar year?

Note: The "total payment" section on your UC-1099G form includes all benefits paid to you during the calendar year, including benefits that were applied to an overpayment.

For more information on how to report your repayment of UC benefits on your tax return, see Unemployment Benefits and Repayments in IRS Pub. 525 or contact the IRS directly at 1-800-829-1040.

6. What do I do if I believe the UC benefit check(s) were not cashed by me, or were cashed without my permission?

To start an investigation, contact a UC Service Center 7 a.m. to 8:30 p.m. Monday through Friday and Sundays 7 a.m. to 2:30 p.m., or the Claims Information Center at (717) 783-3140, Monday through Friday, 7:30 a.m. to 4:30 p.m.

With unemployment rates at record-high levels many workers are facing the prospect of running out of unemployment benefits. Currently the state of Pennsylvania offers a maximum of 99 weeks of unemployment benefits: 26 weeks from the regular state unemployment insurance agency, 53 weeks from the emergency unemployment compensation program and 20 weeks from the extended benefits program.

However, as our reader D. Wood asked recently: “Are there any unemployment benefits after 99 weeks?”

At this moment there are no additional unemployment benefits nor are there any plans for them. What is more, the current extension program which allows for the extended benefits and emergency unemployment compensation benefits will expire at the end of this year. So, it is likely unemployment benefits will be reduced next year to pre-2008 levels.

However, this does not mean there are no additional options to workers who run out of unemployment benefit weeks and still need financial assistance. For instance, Pennsylvania unemployed workers may apply for Temporary Assistance for Needy Families, or TANF, and for General Assistance, GA. Would you like to find more information on these two programs. Click here to visit Pennsylvania’s website on human services or read below for a summary of the most frequently asked questions about these programs.

What Health and Human Services should I apply for?

You should apply for every benefit that you think you may need.

When your application arrives the County Assistance Office will look at your income and tell you what Health and Human Services you can receive.

If I want Cash Assistance, for whom should I apply?

You must apply for

• yourself,
• your spouse (if married),
• any children under age 19 who live with you, and
• any other parents of your children who are living in the household.

If you are a parent under the age of 18, you must include your parents.

You may apply for children related to you who are not your own. If you apply for any such child you must apply for that child’s siblings. You may also apply for yourself, but it is not required.

You may apply for children not related to you under emergency circumstances. At your interview, the caseworker will discuss plans for the children with you. You may also apply for yourself, but it is not required.

You may apply for General Assistance (GA) for yourself, but you must provide information about your spouse if you are married.

You do not need to apply for anyone who is not your dependent or who is not helping to support you or your children. These individuals should apply separately.

If eligible for Cash Assistance benefits, what other benefits will I receive?

If you receive Cash Assistance you also receive Medical Assistance.

You will also be eligible for programs related to The Road to Economic Self-Sufficiency through Employment and Training (RESET)

You will be asked if you want to apply for Food Stamps. If you receive Cash Assistance, you may also be able to receive Food Stamps.

Are there any time limits on Cash Assistance?

A person can receive TANF (Temporary Assistance for Needy Families) for a total of 60 months in a lifetime. This is true if a person is:

1. An adult;
2. A minor child who is the head of household or married to the head of household;
3. A minor child of an adult who has reached the 5-year limit.

Period(s) of TANF receipt need not be consecutive to count toward the 60-month limit.

You may receive Cash Assistance that does not count against your 60-month limit. At your interview, talk to your caseworker.

Single adults, married adults, or children not related to their caretaker, may be able to receive General Assistance (GA). GA has some time limits. These are:

1. Victims of domestic violence (DV) can have a lifetime total of 9 months of GA;
2. A person who is drug and/or alcohol dependent can receive GA for only 9 months in his lifetime;
3. An adult with a temporary disability can get GA while he recovers. A doctor or Psychologist will estimate the recovery time;
4. An adult with a permanent disability, certified by a doctor or Psychologist, has no time limit;
5. An adult, who cares for a disabled individual, has no time limit. A doctor or Psychologist must certify the disability;
6. A child age 18 or under, who is not related to his caretaker, has no time limit.

How much money will I get?

Match the county where you live with the number of people you are applying for to see how much money you could receive. Household income may reduce the amount of money you could receive. Money amounts also vary depending on the county you apply from. Counties are divided into four groups. Click here to see where your county lies and how much you can receive.

In December 2010, the U.S. Congress authorized the extension of federal benefits. However, many states, including Pennsylvania, were warned they would have to tweak their legislation to qualify for these benefits. The previous legislation linked eligibility of workers for extended benefits to the unemployment rate in the last two years. For Pennsylvania to qualify for extended benefits under the current program the Pennsylvania congress needed to modify the criteria to include the last three years in the benchmark deciding which workers received extended benefits and which did not qualify.

The Extended Benefits Program

The Extended Benefits program is designed to help states with especially high unemployment rates and assist workers who do not find a job after their unemployment benefits have ended. However, the eligibility for this program depends on the unemployment rate worsening. If the unemployment rate remains the same or improves, however slightly, eligibility is jeopardized. That is why the Pennsylvania Congress needed to change the rules to an alternative eligibility criteria that looks at the last three years instead of the last two. Under this criteria Pennsylvania’s unemployment rate record, still allows Pennsylvania to qualify for benefits.

However, this change in the state unemployment law did not come without a fight. The republican party were remiss to allowing a modification that would increase the amount of money used by unemployed workers in benefits. Negotiations have been going on for weeks to find a middle ground. The compromise involved reducing the benefits provided to certain high-earning workers by reducing the maximum weekly benefit amount offered to workers. Now the maximum benefit rate in 2012 will  be $573 which will bring millions of dollars in savings. There were worse suggestions by the Republican party. One of these suggestions was that the formula used to calculate state unemployment benefits were slightly modified to reduce the expenditure in wages by $463 million.

This twelfth hour decision help over 45,000 unemployed workers lose their benefits. Pennsylvania is only one of the 26 states that have modified their legislation to allow for the extended benefits program to apply.Yet most of the other states accepted the decision without controversy. However, some states such as South Carolina and Pennsylvania only agreed to modify the rules in the twelfth hour and with onerous grants to expenditure cutting programs.

On June 11, residents in 2009 the state of Pennsylvania lost  the right to receive the extended benefits program, which provides 10 to 20 weeks of benefits. Republicans used the imminent cancellation of payments for workers on extended benefits to score points in their own effort to reduce the cost of unemployment benefits for the states.

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