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Economy

IRS offers options on gig economy workers, unemployment benefits

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WASHINGTON — The Internal Revenue Service reminds workers in the gig
economy and those who claimed unemployment compensation in 2020 of their
options and where to find information on meeting their tax obligations.

Gig economy

The gig economy refers to income earned providing on-demand work
performing services or selling goods, including driving a car for booked
rides or deliveries, renting out property, selling goods online or
freelance work. Often, customers and service providers or sellers are
brought together through a digital platform on an app or website. Visit
the Gig Economy Tax Center on IRS.gov to learn more about withholding and estimated tax requirements for these types of earned income and paid services.

Taxpayers should collect and keep records and receipts during the year. Recordkeeping can help track income, deduct expenses and complete tax returns.

Unemployment benefits

A record number of Americans applied for unemployment compensation in
2020 due to the pandemic. Anyone who received unemployment benefits
will need to report it on their tax returns.

However, the American Rescue Plan, enacted on March 11, 2021,
excludes from income up to $10,200 ($20,400 if married filing jointly)
of unemployment compensation received in 2020 for taxpayers with
modified adjusted gross income under qualifying thresholds. Any amount
over $10,200 is still taxable for each person. To determine if payments
received for being unemployed are taxable, see the Interactive Tax Assistant on IRS.gov.

For those who have already filed their 2020 tax return and paid taxes
on the full amount of unemployment compensation before the law was
passed, they should not file an amended return. The IRS will
automatically refund money to people who already filed their tax return
reporting unemployment compensation.

The IRS will recompute any credits and deductions claimed on the
original return. However, if the reduction of income now qualifies a
taxpayer for a new credit not claimed on the original return, like the
Earned Income Tax Credit (EITC), those taxpayers will need to file an
amended tax return, Form 1040x, to claim the new credit. Taxpayers can
see if they qualify for the EITC at IRS.gov.

Unemployment benefit recipients should have received a Form 1099-G, Certain Government Payments, from
the agency paying the benefits. The form will show the amount of
unemployment compensation they received in 2020 in Box 1, and any
federal income tax withheld in Box 4.

Some states do not mail Form 1099-Gs. Taxpayers may need to get the electronic version from their state’s website.

Taxpayers who received an incorrect Form 1099-G
for unemployment benefits they did not receive should contact the
issuing state agency to request a revised Form 1099-G showing they did
not receive these benefits.

Taxpayers who are unable to obtain a timely, corrected form from
their state should still file an accurate tax return, reporting only the
income they received. A corrected Form 1099-G showing zero unemployment
benefits in cases of identity theft will help taxpayers avoid an
unexpected federal tax bill for unreported income.

Additionally, if taxpayers are concerned that their personal
information has been stolen and they want to protect their identity when
filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS.

Generally, by law, unemployment compensation must be included as
income. Taxable benefits include any of the special unemployment
compensation authorized under the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, enacted in 2020.

If a taxpayer didn’t report income from gig work or unemployment
compensation on a return, a corrected return can be filed using Form 1040-X, Amended U.S. Individual Income Tax Return. Form 1040-X can be filed electronically.

Taxpayers who owe but can’t pay in full always have options to seek help through payment plans and other tools from IRS.gov/payments.

Tax information is also available in:

  1. Spanish (Español) 
  2. Chinese (中文) 
  3. Korean (한국어)
  4. Russian (Pусский)
  5. Vietnamese (TiếngViệt)

Resources

  1. IRS Webinar – Understanding the Gig Economy
  2. Gig Economy and Your Taxes: Things to Know PDF 
  3. Pay As You Go, So You Won’t Owe: A Guide to Withholding & Estimated Taxes 
  4. ID Theft regarding unemployment 
  5. Tax Treatment of unemployment

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Economy

MLB mental health crisis: Inside relief pitching gig economy

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Ryan Buchter, 34, has spent almost half his life pitching in professional baseball. In those 15 years, Buchter has been traded four times, released three times, changed organizations 10 times, pitched for teams in 22 cities and only once spent a full season in the majors without being demoted or released. What his itinerant playing record does not show is its cost: a drinking problem, depression and mental health issues that left him so wounded he is speaking out because he knows his story is too prevalent among ballplayers.



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Economy

New Labor Secretary Says Gig Economy Workers Should Be Classified As Employees | Fisher Phillips

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Secretary of Labor Marty Walsh didn’t beat around the bush when he provided his first public thoughts about the gig economy workforce since assuming office. In an interview with Reuters released on Thursday, Walsh said “in a lot of cases, gig workers should be classified as employees.” His comments should come as little surprise to those in the industry who have tracked his career and followed President Biden’s campaign promises to crack down on purported misclassification.

While he tried to strike a balanced tone – noting that in “some cases” gig workers are treated respectfully, and indicating that he didn’t “begrudge” any companies for raising revenue and making profits – his pointed comments send a direct signal to gig economy businesses that the Biden Department of Labor will soon ramp up efforts to force gig workers to be considered employees.

What Can We Expect?

Walsh said that he wants his agency to have conversations with gig economy companies in the coming months in an effort to ensure workers have access to the types of benefits that a typical employee might have: consistent wages, sick time, health care insurance, and similar benefits. While some business leaders have expressed hope that Walsh’s pragmatic streak demonstrated throughout his career as a union leader and mayor would carry over to the worker classification debate, it appears that he will push through an aggressive agenda on behalf of unions and workers.

First up? We can expect to soon see the DOL to formally rescind the Trump-era “gig economy rule” that was set to make it far easier to classify workers as independent contractors. In its place, the agency will no doubt release a new rule that will more closely align with the Biden administration’s aim to target misclassification and ensure as many workers as possible are considered employees. While litigation filed by business groups is ongoing in an attempt to revive the business-friendly version of the rule, gig economy companies cannot rely on this federal lawsuit to be a magic bullet to erase all concerns in this area.

Walsh also noted the success of the pandemic-related unemployment insurance program that ensured gig economy workers who were left without work could regain some of their lost income. “If the federal government didn’t cover the gig economy workers, those workers would not only have lost their job, but they wouldn’t have had any unemployment benefits to keep their family moving forward. We’d have a lot more difficult situation all across the country,” he said. But in expressing admiration for that legislation – which was paid for by massive stimulus spending bills approved by Congress – he didn’t expressly state how he would expect any future extension of UI benefits for gig workers to be funded or managed.

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GigIndia to provide Rs 3 lakh health insurance to gig workers- The New Indian Express

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By Express News Service

NEW DELHI:  Large scale job losses over the past few quarters has led to many taking up work in the rapidly expanding gig economy, but the unorganised nature of the same may leave a large majority of those workers outside the cover of the formal insurance market. GigIndia, a business-to-business gig marketplace for on-demand work completion, has announced that it will provide free Covid health insurance to active gig workers on its platform covering up to Rs 3 lakh in medical expenses.

The Pune-headquartered firm said in a release that it is offering this insurance coverage to active gig workers in order to make them feel relatively secure during these challenging times. The company also said that it is initiating efforts to ensure that certified ‘giggers’ on its platform continue to receive projects, thereby enabling a steady income.

“The Covid Health Insurance will ensure that medical costs are covered if any gig worker tests positive for Covid-19. We are also providing financial assistance to gig workers, which will help them with essential expenditure such as hospital charges, oxygen cylinders and ventilators, among others,” said Sahil Sharma, Co-founder & CEO, GigIndia.

In addition to the Rs 3 lakh covid health insurance, the company has also set up an internal Rs 10 lakh covid relief fund for gig workers in need, he said, noting that unlike full-time white/grey collar workers, giggers typically do not receive social security benefits. 

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