Question: Does EDD (California) check 1099-MISC Independent Contract (collect, file, apply)

[mragsa]

Hey guys,

I need your help, please. I made a mistake on my Unemployment Benefit (UI) Application Form. I applied for it back in July/2014, during that time, I was trying my best to put down all the truthful information on the part which asks me to list all the companies that I worked for within the 18 months. I did wrote down all of the company's name, salary, and etc but I missed to put down one company's info on the form.

I want to correct it before EDD approach me with questions and assumption that they may think that I have purposely committed to hide the information. Before I report it to EDD, I would like to have some advices from you guys. The company that I worked for and forgot to list it on UI application was with a tutoring company. This company hires tutors as independant contractor and we have to submit the tax using 1099-MISC form.

I read on someone else's thread on here that EDD cares less about the 1099-MISC Form and they only care about W-2 or W-9. They do not look at 1099-MISC at all. I am not sure if this is true and I need some advices. Also I am curious to know how I could make EDD understand that I made a mistake but did not mean to hide the information. I am asking you this question because I know EDD is having lots of issue on fraud cases.

I don't want them to think that I am a liar.

Please help, and thank you very much.

[Chyvan]

What you earned PRIOR to applying is irrelevant and not putting it on your initial application means nothing. CA will only care if you earned money AFTER applying and didn't report it on your biweekly claim form.

[mragsa]

Originally Posted by Chyvan

What you earned PRIOR to applying is irrelevant and not putting it on your initial application means nothing. CA will only cares i you earned money AFTER applying and didn't report it on your biweekly claim form.

Chyvan, thanks for your reply. I understand what you have wrote but doesn't EDD looks into claimant's tax and looks for hidden earnings?

[Chyvan]

What hidden income? Do you not report your 1099 income on your tax returns? That has nothing to do with EDD. Sure EDD might tattle to the tax people, but trying to fix things with EDD won't help you. If that's the case, you need to file amended tax returns. Don't waste your energy calling EDD.

[Ariadne22]

Originally Posted by mragsa

doesn't EDD looks into claimant's tax and looks for hidden earnings?

NO. That is the job of the IRS and the California Francise Tax Board - the INCOME TAX COLLECTORS.

When you first apply for unemployment benefits, CA Employment Development Department (not the California Franchise Tax Board) routinely asks about your past employers - BUT - can only base a claim on W-2 earnings that have been reported to CA by employers - unless you have asked CA EDD to recharacterize those 1099 earnings in order to improve your benefit.

You are confused on the difference between:

• eligibility for UE benefits based on W-2 earnings and

and

• failure to report earnings - both on W-2 and 1099 - WHILE you are collecting benefits

EDD only cares about your 1099 earnings IF you are collecting unemployment benefits and also earning on 1099 at the same time. As long you report your 1099 earnings when you claim benefits, these 1099 earnings are not "hidden'" and you are complying with the law.

You are looking for a problem where there is none. Neglecting to list a 1099 employer when you apply for benefits does not affect your claim. Forget about it.

[mragsa]

Originally Posted by Ariadne22

NO. That is the job of the IRS and the California Francise Tax Board - the INCOME TAX COLLECTORS.

When you first apply for unemployment benefits, CA Employment Development Department (not the California Franchise Tax Board) routinely asks about your past employers - BUT - can only base a claim on W-2 earnings that have been reported to CA by employers - unless you have asked CA EDD to recharacterize those 1099 earnings in order to improve your benefit.

You are confused on the difference between:

• eligibility for UE benefits based on W-2 earnings and

and

• failure to report earnings - both on W-2 and 1099 - WHILE you are collecting benefits

EDD only cares about your 1099 earnings IF you are collecting unemployment benefits and also earning on 1099 at the same time. As long you report your 1099 earnings when you claim benefits, these 1099 earnings are not "hidden'" and you are complying with the law.

You are looking for a problem where there is none. Neglecting to list a 1099 employer when you apply for benefits does not affect your claim. Forget about it.

Hi Ariadne22,

Thanks for your comment.

So in this case I do not need to report it to EDD because I didn't collect the benefits while I was working for a tutoring company. I worked for the tutoring company (independant Contract) from Jan/2014 to April/2014. I didn't collect the benefits at that time. I applied the UI benefit on July/2014.

So in your explanation, EDD cares less and I don't need to report about my 1099-MISC even though I forgot to report it on the UI application form.

My question is, should I still let them know to avoid negative consequences.

Please let me know

[Ariadne22]

Originally Posted by mragsa

My question is, should I still let them know to avoid negative consequences.

What negative consequences??? Already answered, here:

Originally Posted by Ariadne22

You are looking for a problem where there is none. Neglecting to list a 1099 employer when you apply for benefits does not affect your claim. Forget about it.

Or, to put it another way - NO.

[mragsa]

Originally Posted by Ariadne22

What negative consequences??? Already answered, here:
Or, to put it another way - NO.

Hi Ariadne22,

Thank you very much for your advise. I was a bit worried because on the EDD website it said that they have the rights to check both state and federal taxes of individual. I wasn't sure if they were going to take a look at my 2014 tax when I submit it next year and if they see that I have filed 1099-MISC on my tax, the EDD will approach me with questions.

After reading your comments and the other's guys, now I know how it all works. Thank you.

[GuzziRacer26]

Originally Posted by Ariadne22

NO. That is the job of the IRS and the California Francise Tax Board - the INCOME TAX COLLECTORS.

When you first apply for unemployment benefits, CA Employment Development Department (not the California Franchise Tax Board) routinely asks about your past employers - BUT - can only base a claim on W-2 earnings that have been reported to CA by employers - unless you have asked CA EDD to recharacterize those 1099 earnings in order to improve your benefit.

You are confused on the difference between:

• eligibility for UE benefits based on W-2 earnings and

and

• failure to report earnings - both on W-2 and 1099 - WHILE you are collecting benefits

EDD only cares about your 1099 earnings IF you are collecting unemployment benefits and also earning on 1099 at the same time. As long you report your 1099 earnings when you claim benefits, these 1099 earnings are not "hidden'" and you are complying with the law.

You are looking for a problem where there is none. Neglecting to list a 1099 employer when you apply for benefits does not affect your claim. Forget about it.

Hey Ariadne22-

Different kind of question with a different situation…. My entire UI benefits claim already ran its full course; it ended in October…. However, I had 1099 income that came through for me during the claim period. My question is: Since this various 1099 income is not reported until the end of the year and does not get associated with when that work was done (while collecting UI), should I volunteer this to EDD? I could have potentially earned that 1099 income after my claim expired right?

[Chyvan]

EDD won't take your word for anything. If discovered, they will ask you about it, and then they will ask the issuer of the 1099 about it, so don't think lying about the time period the work was performed is your ticket to getting away with it.