State pushes back release of jobless aid tax forms, delaying some tax filings for unemployed

Michigan will delay the release of tax forms needed for residents to report how much they earned in unemployment benefits in 2021. 

The 1099-G forms, usually mailed to residents by Jan. 31, won't arrive until late February after the Unemployment Insurance Agency gained an extension from the Internal Revenue Service. 

The delay is a result of thousands of waivers granted to unemployment recipients who the state said were mistakenly paid benefits because of an agency error, the agency said in a statement Monday. 

“Our top priority is ensuring that Michiganders have the most accurate information when completing their taxes," said Julia Dale, director for the agency. “This additional time will help us get the correct amount so taxpayers can complete their state and federal tax returns.”

The 1099-G forms will eventually be posted to claimants' Michigan Web Account Manager, or MIWAM, accounts for people requesting electronic copies. All others will be sent through the mail. 

Thousands of Michigan jobless aid recipients were sent waivers last year after the state mailed 648,100 notices to claimants in June alerting them that they had to recertify because of an agency error. The error stemmed from four eligibility requirements included in Michigan's application for federal Pandemic Unemployment Assistance that the federal government flagged as inaccurate and required Michigan to demand recertification under approved eligibility criteria. 

Gov. Gretchen Whitmer said she would grant waivers to all Michigan residents affected by the error but it's unclear how many have received the forms. The Detroit News has been asking the agency for updated numbers for about a week but has yet to receive any data from the agency.

Advocates have said the vast majority of waivers went to people who ignored the recertification requests. Those who did attempt to recertify were caught up in a bureaucratic struggle for closure. 

Countless others were unaffected by the eligibility error, but were sent demands for repayment months and sometimes a year after receiving pandemic assistance. In many cases, those demands were based on other agency errors or misunderstandings about who was eligible for the federal aid — nearly all of those demands were made to individuals who had already spent their aid. 

Those individuals, who don't have the promise of an automatic waiver, filed a class action lawsuit in state court Friday. 

The open cases and appeals have become more pressing with the prospect of tax season and potential tax refund garnishments on the horizon. 

The agency said Monday it was asking the U.S. Department of Labor to grant additional waivers for non-fraudulent claims filed during the pandemic.

“We continue to work with our partners on an issue that other states across the country are also dealing with and we call on Congress to quickly devise a solution that will help Michigan’s working families," Dale said. 

eleblanc@detroitnews.com