 Income tax 2021-2022. Unemployment compensation. Get ready to get refunds to the max. Dive it in to income tax 2021-2022. Income tax formula, line one income. This is the first page of the form 1040, looking at line number eight. Other income from schedule one line 10. Here's the schedule one part one. We're looking at number seven. Unemployment compensation. The total from schedule one part one flows back into, as we saw the first page of the form 1040, line number eight. Other income from schedule one. Back to the schedule one. We're focused in on the unemployment compensation. Just to recap in general of unemployment compensation and just note that unemployment compensation has become more of a big deal and kind of caused some confusion over the last couple of years. The IRS has sent out a whole bunch of stuff in the last year or so to deal with kind of the confusion that's been brought out for it. Obviously a lot more people are going through unemployment kind of situations as they do job changes over the last couple of years. So that added to confusion and also because of the benefits and people going in and out of possibly jobs more than normal in the prior couple of years, there was an increase in people trying to identity theft or identity theft related to unemployment compensation. They also changed the law for the unemployment compensation for 2020. So in fact, we're basically back to normal for 2021. The normal situation being that if you qualify for unemployment and if you filed for unemployment and received unemployment, you should get documentation showing the unemployment that you received and you typically do have to record it as income possibly resulting in paying income tax on the unemployment. In 2020, they basically made an adjustment to that saying that part of the unemployment could be exempt and they made that adjustment a little bit late in the year. So they had to kind of go back and fix it, which there's a whole bunch of stuff that went out on that the IRS addressed it multiple times, many times throughout their current year. So people might still have some confusion with that due to the change that happened last year, but we're basically back to the normal for 2021. And 2020 is that is that weird year where you might have a situation where you have that exempt component related to it. So keep that in mind. Unemployment compensation, you should receive a form 1099 G. So you're going to get the 1099 like always the 1099 is going to be a form that indicates that you may need to record it as income possibly paying taxes on it showing in box one, the total unemployment compensation paid to you in 2021 report this amount online seven. If the amount reported in box one of your forms 1099 G is incorrect report online seven only the actual amount of unemployment compensation paid to you in 2021. This is becoming more of a more of a problem. It was a big problem in 2020. And they're thinking the problem could continue for 2021. That's going to be people stealing other people's identities in order to try to get some of the stimulus money or the or the kind of compensation money that's available for safety net type of programs, including the unemployment. So there was a lot of huge increase in false claims apparently for unemployment. So you got to be careful of that. If the if the 1099 G that you got is incorrect, like any 1099 that you get, if it's incorrect, then you want to report the correct amount on your tax return, but you cannot fix the problem as easily by going to the IRS. They're both government entities in this case. It's meaning the state gave you the 1099 most likely and then the and then the IRS is the one that's dealing with the income tax related to it. But the IRS doesn't talk to the state directly in normal kind of conditions under that kind of condition. So the IRS is going to have the 1099 G. If it's fraudulated, if it's wrong, then you can't really remedy it as easily on the IRS side. You want to report your proper income, but it will almost surely cause a problem and could delay the refund. What you would like to do is go back to the state and if it was any other 1099, you would like to go to the issuer of the 1099 and tell them, Hey, there's a problem. You got fraud that took place. Someone stole my identity. I need you to fix the 1099. Not just to send it to me because I know I didn't get any money from you. I already know the correct amount. I want you to send it to the IRS so that when I file my taxes, they're not going to match my numbers up to their systems numbers, come up with something different and then have to delay the whole process as they kind of figure the whole thing out. Again, that's the case with any false or incorrect documentation. The 1099 G is the biggest example that we've seen in the last couple years because of the fraud situation that has been taking place and the identity theft that has been taking place. So if you made contributions to a government unemployment compensation program or to a government paid family leave program and you aren't itemizing deductions, reduce the amount you report online seven by those contributions. If you are itemized deductions, see instructions on form 1099 G unemployment compensation. Your state may issue a separate forms 1099 G for unemployment compensation received from the state and the additional 300 a week federal unemployment compensation related to the coronavirus relief include all unemployment compensation received online seven. If you receive an overpayment of the unemployment compensation in 2021 and you repaid any of it in 2021, subtract the amount you repaid from the total amount you received, enter the result in line 21. So obviously if you didn't get the keep the money and you had to repay it, then you can compensate for that. Also enter repaid and the amounts you repaid in the dotted line next to line seven. So again, the general idea here being is that you have you want to report what's on the 1099. If there's any adjustment to that, say you repaid it or something and that's different than what's on the 1099, then you're going to want to tell them that so that they they can match up what they have on their side and not issue it or have have a problem or disparity. And remember, any kind of thing that throws the IRS off these days, and that they can't automatically process something without a human being looking at it, any kind of problem that requires a human being is likely to delay the refund because they're way backed up with all the coronavirus stuff and the social distancing and they can't go to work and, you know, you can't whatever all the all the rules have been going in place. They've got a whole bunch of backlogs of tax returns. So so you want to get it as smoothly processed as possible if you're looking to get the refund, you know, as fast as possible. So if in 2021 you repaid more than 3000 of unemployment compensation that you included in gross income in the in earlier year, seed repayments in Publication 525 for details on how to report the payment. If you received unemployment compensation in 2021, your state may issue an electronic form 1099 G instead of being mailed to you. Check your state's unemployment compensation website for more information.