Being on unemployment for 9.5 months of 2020 made for a rude awakening when I started my taxes. I use TurboTax as they make it easy as they upload information from the previous year. I was on unemployment for so long as it would not be safe to have 10-12 different riders in my car each day. So before I received my 1099G from the State of Pennsylvania I owed around $2,600 and that was mainly because of taking money out of my IRA, that I used to make ends meet. Then when I put the 1099G in TurboTax now said we would owe $6,700 and change. Then because I was on the ACA all year long my 1095A arrived and when that went into TurboTax I almost passed out! Now my Federal taxes owed shows just under $17,000. There is only one way I can pay that and that is to take out a Home Equity loan before tax day. However since the banks will not take unemployment as income, I have to wait until May as my Social Security does not start until April. So in the meantime I will have to pay 3% to pull at least $12,000 off of a credit card. That is only if my unemployment comes in by April. Now that is another problem.
When #45 signed the unemployment extension on Dec 27, it took the State of Pennsylvania almost to the end of January to fix their system so that Pandemic claims could be processed. However it was not really fixed until just a few days ago. So in the last week of January I received an email from L&I saying that I would have to reactivate my claim by January 29 or it would expire. So in attempting to do that I come across a screen labeled Citizenship. And the first dropdown arrow ask you to choose from the following: US Citizen, Permanent Resident, and Green Card holder. However Permanent Resident was the only choice you could make and I am a US citizen having been born on March 4, 1959 in Philadelphia. So I tried to call customer service for L&I and got a busy signal on 54 attempts on Tuesday January 26. On Wednesday I tried again for another 5 hours and could not get through. At this point I thought I had to get through that Citizenship screen or lose unemployment. So I tried again and decided to see what choices I would get in the second dropdown for a Permanent Resident. The only real choice was an unexpired Foreign Passport. So I talked with my better half and we agreed this was the only way to do it. Since the next area asked for the passport number, issue date, and the Country that issued the passport and the USA was there I thought this would be ok. And the next screen appears and asks for 2020 earnings which it should not of, I found out a week later about that. So I was able to reactive my claim and it said I need to wait for a week before I can file and that should have not been the case either. Then I get an email from L&I saying my claim will be held up and that I need to email them my alien number. And I said OMG! What have I done.
So after the week was up I was able to file for 5 weeks, but I am still waiting for them to look at my SS card and birth certificate that I uploaded on the 25th of January. So if I get the $5,300 that I see I am entitled to on my dashboard and should have by tax day I can use $5,000 of that to help pay the $17,000.
Now I did see a glimmer of hope on Thursday when I saw a democrat rep from Iowa say that there should be no taxes on unemployment. Later Dick Durbin said no taxes on the first $10,200. Only problem with that is I would still owe $15,000 and change in taxes. So all of it needs to be waived to save me from having to pay a much bigger amount.
But what about people who can’t float $12,000+ off of credit cards and then get a home equity loan? This is going to cause major problems for over 10 million people.
And what do I do about 2021 tax? If I take unemployment and stay on the ACA I will have a big tax bill next year. So do I stop unemployment or stop paying for the ACA?