Unemployment "Overpayment" & 1099G

[shayshay0911]

What is the name of your state (only U.S. law)? NC
One day while checking my bank account I noticed there were a few hundred extra dollars- courtesy of NCESC. I called to find out why it was direct deposited to my account and was told I was eligible for one of the emergency compensation programs. Long story short, the next thing I know I'm getting a letter that it was a mistake and I need to pay it back. I made arrangements to pay back in monthly installments since I am still unemployed and have NO income. Now I am getting a 1099-G form the full amount they deposited! Do I need to be dealing with the IRS or the NCESC or both? While I'm asking this--I also used almost all of my IRA to pay bills and will now be having to pay early withdrawal penalties. Is there ANY help for those of us in this situation to possibly not have to pay those penalties? As I said, other than the $236 unemployment mistake and what I took from my IRA-I have $0 income.What is the name of your state (only U.S. law)?

 

[LdiJ]

What is the name of your state (only U.S. law)? NC
One day while checking my bank account I noticed there were a few hundred extra dollars- courtesy of NCESC. I called to find out why it was direct deposited to my account and was told I was eligible for one of the emergency compensation programs. Long story short, the next thing I know I'm getting a letter that it was a mistake and I need to pay it back. I made arrangements to pay back in monthly installments since I am still unemployed and have NO income. Now I am getting a 1099-G form the full amount they deposited! Do I need to be dealing with the IRS or the NCESC or both? While I'm asking this--I also used almost all of my IRA to pay bills and will now be having to pay early withdrawal penalties. Is there ANY help for those of us in this situation to possibly not have to pay those penalties? As I said, other than the $236 unemployment mistake and what I took from my IRA-I have $0 income.What is the name of your state (only U.S. law)?

There is possibly some relief on the early withdrawal penalty. It depends on whether or not you used some or all of the money for any of the available exceptions.

See the instructions for form 5329 at irs.gov

http://www.irs.gov/pub/irs-pdf/i5329.pdf

 

[FlyingRon]

A 1099-G just indicates you were given money from the government that may be taxable. If you repaid it, it probably isn't. You get the same form for state income tax refunds. Lidj will be by shortly hopefully.

 

[LdiJ]

A 1099-G just indicates you were given money from the government that may be taxable. If you repaid it, it probably isn't. You get the same form for state income tax refunds. Lidj will be by shortly hopefully.

If he repaid it all in 2009, then he doesn't have a problem. If he did not, then its taxable income this year, but he will get another 1099G next year that will show that he paid it back, and he will get to deduct it next year.