NY unemployment tax refund from last year now making me pay taxes on the interest?

Yep, welcome to the system 🤡 Literally every penny they give you, they want some back. Its so wild how we just accept this as normal.

After weeks trying to get through to someone about my refund, I finally gave up calling and used a service called claimyr.com. Got connected to a real person in about 20 minutes and they explained exactly what was happening with all these forms. Talking to an agent got my issues cleared up super fast. They even have this video explaining how it works: https://youtu.be/Rdqa1gKtxuE

Same thing happened to me. Got back $1720 in October after waiting forever, and now they sent me a 1099-INT for $42.50. That form is for reporting interest as income. It's total BS but all refund interest is taxable by law.

Listen heres what's happening. When the government pays interest on anything - tax refunds, court judgments, whatever - that interest is considered income and is taxable. They have to send you a 1099-INT if its over $10. Its not just unemployment, its any interest the govt pays you. Sucks but thats how it works.

THIS IS WHY AMERICA IS DOOMED 😡 Every single agency is designed to extract maximum money from regular people while big corporations pay NOTHING. The IRS goes after small fish because they dont have lawyers to fight back.

Ran into this exact situation but with a different amount. Got a refund of $1,890 in August and just now received a 1099-INT for $51. Absolutely every transaction with the government comes with strings! Does anyone know if we need to report this if it's under a certain amount?

I work as a tax preparer and deal with this all the time. This isn't specific to unemployment taxes - ANY interest the government pays you is considered taxable income. It's ridiculous but it's how our tax system works. They hold your money interest-free when you owe them, but when they owe you, they pay interest and then tax that interest. The whole system needs an overhaul.

The real problem is how long they took to process these unemployment tax refunds in the first place! I was literally missing rent payments waiting for money THEY OWED ME. At least you got your refund. I know people still waiting on theirs from last year.

🔥🔥 IMPORTANT INFO FOR EVERYONE IN THIS SITUATION 🔥🔥 I've been through this whole mess and have some actual info that might help: Yes, the 1099-INT is legitimate and yes, you legally need to report that interest as income. It sucks but that's how it works. If you're still waiting on your unemployment tax refund, don't just sit by the phone trying to call forever. I tried that approach for weeks and got nowhere. What finally worked was using claimyr.com - they have a system that calls for you and connects you with an agent when one picks up. Once I actually got someone on the phone, they resolved my case in minutes. Apparently there are all kinds of glitches in the system that only get fixed when you speak to someone directly. When you do your taxes this year, be prepared for this interest situation. You'll need to include the 1099-INT amount on Schedule B if you itemize, or just add it to your income line if taking the standard deduction. Also, keep in mind NY state has its own rules about these refunds, so make sure you're checking both federal and state guidelines. The unemployment tax situation in New York has been an absolute disaster from the beginning. Hope this helps somebody avoid the weeks of frustration I went through!

I didn't even GET my unemployment tax refund yet and they're already sending me forms about it! The NY unemployment system is completely broken.

Anyone know what form we use to report this interest? Is it different from regular interest income?

im actually impressed they paid interest at all lol. the government rarely admits when they mess up, much less pays you for it. silver lining maybe?

Update: just called the NY tax department and they confirmed this is 100% legit. Interest on government payments is always taxable. The lady I spoke to said they've been getting calls about this all day.

The whole unemployment tax thing was handled so badly from the start. First they tax the benefits during a pandemic, then they say 'oops nevermind' after everyone already filed, then they take MONTHS to send refunds, and now they want tax on the interest. What a joke.