Vt. recalls thousands of incorrect 1099-G tax forms

The state of Vermont is recalling tens of thousands of incorrect 1099-G tax forms issued to those who received unemployment benefits in 2020.

Due to a corrupted file, information from the Vermont Department of Labor's main frame resulted in errors in multiple 1099-G forms recently printed and mailed, according to Labor Commissioner Michael Harrington. Some included a name and social security number different from the recipient's. Out of the 80,000 forms mailed so far, about 55,000 were corrupted.

At Tuesday's press conference, Harrington explained that individuals began receiving 1099-G documents that either had the wrong name and address on the front of the envelope, or once opened, had the incorrect name and social security number on the document inside. The state is asking recipients to return all incorrect forms, and identity protection services are being offered for anyone whose information was compromised. Harrington also said the state is examining quality control measures for the short-term and long-term, including measures to ensure that forms being returned are reissued correctly.

"We're neck-deep in trying to move through this process as quickly as we can to get information to claimants and impacted individuals in an expedited manner," he said. According to Harrington, the labor department is sending out a follow-up communication which includes a pre-stamped envelope for returning incorrect forms.

This was the beginning of a process to issue a whopping 180,000 1099-G forms — an enormous increase due to the number of people who received unemployment benefits last year during the pandemic. On Tuesday, Harrington explained several factors add potential for error, including the fact that, due to the age of the main frame, many manual steps have to be taken during different processes. Additionally, benefits were released from multiple programs in 2020, and those programs reside on multiple computer systems.

The notification and outreach process about the incorrect forms should take place over the next two weeks, Harrington added.

— Gareth Henderson