If I paid taxes on unemployment will I get a refund? 2022 California EDD question

No she had the 1099G, I gave her everything. The 1099G showed the withheld amount in box 4 and she included it.

Box 4 is the federal withholding yeah. That gets applied to your total federal tax bill just like W-2 withholding does. So whether you get any of it back depends on what you actually owed for the whole year.

Okay that actually makes a lot of sense when you put it that way. So the smaller refund could just mean the withholding covered most of what I owed and there wasn't much left over.

Exactly right. Some people get surprised because they expect a big refund just because they had money withheld but that's not how it works, the refund is just the difference between what you prepaid and what you actually owed.

This is what messed me up my first time too. I thought the withholding was like a separate tax specifically on the unemployment and I'd get it back separately but no it all goes into the same pot.

Oh that's a good point. My preparer didn't apply any California state tax to it, just the federal. Good to know that was correct.

Yeah the California exemption trips people up sometimes because they assume if it's taxable federally it must be taxable in the state too. But EDD benefits are specifically excluded from California income tax. Only the feds want their cut.

Had an argument with my tax person about this exact thing one year because they almost added it to my state return. Worth double-checking your state return to make sure the 1099G income is listed on the federal side but excluded from the California calculation.

Glad you got that sorted. The adjudication thing sounds stressful on top of trying to figure out the tax side.

My claim had a similar hold on it for a few weeks. Did EDD eventually release all the back weeks at once once the issue was cleared up?

Yeah they released the pending weeks after the interview was done and I'd certified for them. Showed up in Claim History pretty quickly after that.

The 1099G adds up everything withheld across the whole benefit year and puts it in box 4. It doesn't break it down week by week. Your total benefits paid are in box 1 and total federal withholding is in box 4, that's it.

Okay good, so I don't need to track it myself, the form has everything the IRS needs.

Correct. Box 1 and box 4 are what your tax software or preparer uses. The form handles all the math from EDD's side.

Not for a week already certified. The choice you make at the time of that certification is what applies to that payment. Going forward you can change it on the next certification but you can't go back and modify a payment that already went through.

Ugh okay. I skipped withholding for a few weeks in early 2022 thinking I'd be back to work fast and then wasn't, so I ended up owing a bit. Lesson learned.

Same mistake a lot of people make. The 10% feels like a lot when you're already on reduced income but it beats getting a surprise bill in April.

EDD sends it out every January for the prior year. If you went paperless in your account settings it would be in UI Online instead of your mailbox. Log into myEDD at https://myedd.edd.ca.gov/ and check under Payments, then look for Form 1099G. EDD keeps them available there for five years.

Oh I didn't even think to look in UI Online. Let me check that.

Mine was in there even though I thought I'd selected mail. Definitely worth checking the online account first.

Someone I know skipped reporting theirs and got a CP2000 notice from the IRS about a year later. Added stress nobody needs.

Exactly. The IRS matching program catches it almost every time. Just include it and let your software do the math, it's not complicated.

And if you owe because of it you can usually set up a payment plan with the IRS. Not ideal but way better than ignoring it.

Severance from your employer shows up on your W-2, not the 1099G. The 1099G only covers what EDD paid you in unemployment benefits and what was withheld from those payments. Your employer's severance is their payroll, so it goes through their payroll system.

That makes sense. So I'd have a W-2 from the employer that includes the severance and a separate 1099G from EDD for the UI benefits and I just bring both to my preparer.

Yep that's exactly right. Two separate forms, two separate income sources, all lands on the same federal return.

Yeah EDD does issue corrected 1099Gs, it's not super common but it happens. I'd message them through UI Online first to flag the discrepancy and ask them to reconcile it. Bring your Claim History printout or payment records as backup when you do.

Okay, is there a specific form I need to request or just a message through the account?

A message through UI Online is the right starting point. Explain the discrepancy and what your payment history shows. They'll review it on their end and send out a corrected form if warranted.

Worth filing your return accurately while you wait if the difference is small and you're confident in your records. You can always amend with a 1040-X if the corrected 1099G changes your numbers.

You still need to show it on the federal return where it gets counted as income. For California's return most tax software automatically backs out the unemployment income from the state calculation once you've entered the 1099G. You don't have to do it manually, it just happens because of how California treats it. But it does still show up in the process even if it doesn't end up taxed.

Oh okay. I was worried I had to like, track down an exemption form or something. Good to know the software handles it.

I'd check directly with Covered California on that one. The rules around what counts as income for health coverage eligibility are kind of their domain, not EDD's.

Yeah that's outside what EDD explains. Worth a separate question to Covered California directly since they have their own income calculation for subsidies.

This is actually really helpful to hear as a concrete example. So it really does depend on what your actual tax bracket ended up being for the whole year.

Exactly. If your combined income kept you in a lower bracket the 10% withholding probably over-covered it and you'd see a refund. If you had more income and pushed into a higher bracket you might have underpaid even with the 10%.

This is the clearest explanation I've seen in this whole thread honestly. It's just basic withholding math applied to EDD payments instead of a paycheck.

How long are we talking? I amended mine like six months ago and it's still showing as processing.

Honestly it varies a lot. The IRS has had backlogs on amended returns for a while. Six months isn't unusual unfortunately. You can check the status using the Where's My Amended Return tool on the IRS site.

This is why I'm hesitant to amend if EDD does issue me a corrected 1099G. Good to know what I'm getting into time-wise.

Okay I think I've been thinking about this wrong this whole time. I was expecting a bigger refund but maybe my preparer did everything right and the smaller amount was just accurate withholding doing its job.

Probably exactly that. Worth reviewing your return together with her and asking her to walk you through how the 1099G income was incorporated. If the numbers add up, the smaller refund is just the right answer.

Two months is a really long time to be stuck on identity verification. Did all the pending weeks release at once?

They did. It was a big payment all at once which was both a relief and kind of surreal after waiting so long. The 1099G at the end of the year had the full amount in box 1 regardless of when it actually hit my account.

EDD only withholds federal taxes when you elect it. There's no California state withholding option because the state doesn't tax unemployment benefits at all. So no state withholding, no state tax on that income, just the optional 10% federal.

That is so much simpler than I expected. Good to know I'm not missing a separate state withholding election somewhere.

Nope, you're not missing anything. The only choice EDD gives you at certification is whether to take the 10% federal. The California side takes care of itself because there's nothing owed to the state.

The form in UI Online is the same one EDD files with the IRS. What you see in your account under Form 1099G is exactly what was reported. If there's ever a discrepancy between what EDD issued and what the IRS has on file, that gets worked out between EDD and the IRS, not by you manually.

Okay good. So I can just use the UI Online version for my taxes without worrying that some other version exists somewhere.

The 1099G reflects the tax year the payments were actually made, not the weeks they covered. So if EDD paid you in December 2022 it goes on the 2022 1099G even if those weeks were from earlier. If a payment posted in January 2023 it would show on the 2023 form instead. The date of the actual payment is what matters, not what certification period it was for.

That explains it. One of my late payments from a held week must have finally cleared in December and landed on the 2022 form even though the week itself was from like September.

Yep the timing of when EDD actually released the payment is what determines which 1099G year it falls into. Contact EDD if the amount still seems off after you account for that.

Really important point. Unemployment identity fraud was rampant in 2022 and a lot of people got 1099Gs for claims they had nothing to do with. If the name and SSN match but you never filed, report it immediately.

Does reporting the fraud also deal with the IRS side or is that a separate step?

You'd need to contact the IRS separately to let them know the 1099G is fraudulent so they don't match it against your return. The IRS has a process for that specific situation. EDD handles the California side and the IRS handles the federal reporting side, they don't automatically communicate the resolution to each other.

This is a really useful data point. I'm glad you mentioned checking UI Online for the most current version rather than just using whatever the mail arrives with.

Yeah the corrected form supersedes whatever you got in the mail. UI Online is always going to have the current version, so that's the one to use.

The high volume message is so demoralizing when you have a specific question you need answered. Glad you got it sorted out.

The discrepancy between Claim History and the 1099G number is something that trips people up. Good to know the 1099G is the authoritative one for tax purposes.