Skip to main contentWe don't envy the folks at the Oregon Employment Department. Dealing with a quarter-million people who've lost their jobs has got to be depressing. And informing some of them that their unemployment claims have been denied has got to be tough.
But making them pay taxes on the money they have to give back...that is, well, roguish.
That's exactly what happened to Kim Barigar, who lost his job last year and received four weeks of unemployment checks before the state denied his claim (his former employer says Barigar quit). Though he thinks he's entitled to the money, Barigar doesn't fault the state for denying his claim. And he doesn't begrudge the state for wanting its cash back. But, he asks, why should he have to pay state and federal taxes on it?
Good question.
Barigar was notified last August that his claim was denied and that he'd be getting further instructions about how to "repay" the "overpayment." Those instructions, however, didn't come until five months later, on Jan. 28. That means that he still had the cash, which is taxed income, at the end of the calendar year. Had he been able to repay the state before Dec. 31, there would have been no tax liability. Instead, he'll send more than $200 to the state and the feds.
State officials told WW they don't know how many people are in Barigar's position, but given that 1,300 others also were given repayment instructions in January, it's a safe bet he's got lots of company.
Officials note that there are procedures for some taxpayers to avoid the tax on repaid benefits, but they concede that not everyone qualifies. Tom Fuller, a spokesman for the Employment Department, says the state is not intentionally taxing the unemployed. "We don't target anyone," he says. "Our charge is simply to apply the laws governing unemployment benefits."
Nevertheless, the fact remains that, come April, hundreds and maybe thousands of Oregonians will be taxed on income they didn't get to keep. As Barigar says, "It really, really smells."
WWeek 2015