Vermonters: Department of Labor provides update on data breach and 1099-G tax form

Possible Data Breach

Good evening,

If you or a family member has received unemployment income this year, please pay attention to the press release below about a data breach affecting a select group of up to 50,000 Vermonters. Not all unemployment claimants are thought to be affected.

I will be providing updates as we receive them, and ask if you have been impacted by this breach that you:

  1. Respond as requested by the Department of Labor
  2. Let me know that you have been affected and when you responded to the Department of Labor

This is a good time to review both how to protect your personally identifiable information, and what to do if you are the victim of identity theft.

The protection and privacy of your personal data by state and federal government officials should be expected and this breach is unacceptable. An internal investigation is underway, and the Speaker of the House has also assured me the legislature will be conducting oversight hearings to understand what happened.

Rep. Laura Sibilia lsibilia@leg.state.vt.us


For Immediate Release:

February 1, 2020
Contact:
Kyle Thweatt, Vermont Department of Labor
802-461-8807 | kyle.thweatt@vermont.gov

***FOR IMMEDIATE RELEASE***

DEPARTMENT OF LABOR PROVIDES UPDATE ON 1099-G TAX FORM ON-GOING ISSUE

Montpelier, Vt. – On Monday, Department of Labor Commissioner Michael Harrington briefed the media to provide an update on the on-going issue involving 1099-G tax documents issued by the Department.

A transcript of the Commissioner’s remarks is provided below.

Remarks:

On Monday, February 1st at approximately 9:30am the Department of Labor began receiving reports regarding discrepancies involving 1099G tax documents that were issued by the Department for unemployment insurance benefit purposes. Upon further review of the reports that were coming to the Department, we learned that individuals were receiving 1099G tax documents where the name and mailing address did not match on the front of the envelop and in other cases where the name and social security number on the inside did not match the recipient. Additionally, we believe that in certain cases individuals may have received another claimant’s name and social security number.

As of now, the Department believes this issue is specific to the 1099s that were associated with the Lost Wages Assistance (LWA) program and a portion of the Vermont Short Term Supplemental benefit population; however, the Department is issuing a mass recall of ALL 1099s that have been mailed, regardless of program. This is being done out of an abundance of caution. The Department will be mailing further instructions to everyone who received a 1099, along with a self-addressed stamped envelope, to return the incorrect 1099 to the Department.

In addition, recognizing that there is the potential of the improper release of confidential and personal information, the Department has already been in contact with the Vermont Attorney General’s Office in accordance with state statute, and we will be providing all impacted individuals with the option to enroll in ID protection services. This improper release of data did not occur in every instance, but for those cases where an individual’s information was released, they will be provided the opportunity for identity protection. More specific information will be provided in a mailing to impacted individuals along with further instructions.

We are still in the midst of investigating this issue, the cause of the issue, and the next steps for impacted individuals, but in the immediate, individuals should do the following:

  • If an individual receives a 1099 letter from the Department and the name and address on the front do not match, they should not open the 1099. The Department will mail them further instructions for returning the 1099. 
  • If an individual receives a 1099 letter from the Department and the name and address on the front do match, but when they open the 1099, the information on the inside does not match their information, they should hold onto the 1099. The Department will mail them further instructions for returning the 1099. 
  • If there is even the possibility that an individual’s confidential information was improperly released, the Department will mail them instructions for protecting their identity and how to enroll in consumer protection services through the Department.
  • The Department will be issuing additional guidance to these populations later today/tomorrow along with next steps.
  • This issue does not impact an individual’s claim or benefits. This issue is specific to the printing and mailing of 1099 tax documents.
  • No incorrect tax information has been shared with the State or Federal tax departments, nor the IRS. The Department will ensure that correct 1099 tax information is sent to the tax departments and IRS for proper tax reporting.
  • All claimants will receive an new 1099G tax document from the Unemployment Insurance Division.

I know there are many questions around how this happened and exactly who is impacted and to what extent, and I promise that we will conduct a thorough review of the incident; however, at this time we are focused on getting important information to impacted Vermonters as quickly as possible. This is obviously frustrating, as many Vermonters rely on state government to issue accurate and timely information, let alone during this public health emergency. I want to assure all of you that we are working as fast as we can to correct this error and ensure that this does not happened in the future.

Read the full release on the Department of Labor website at https://labor.vermont.gov/press-release/department-labor-provides-update-1099-g-tax-form-ongoing-issue

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