MONTPELIER — The state House of Representatives’ two financial oversight committees on Tuesday supported a language change that will allow the state Tax Department to share data with the Department of Labor to make sure corrected tax forms being sent to some unemployment claimants are, in fact, correct.
But members of the House Appropriations and Ways & Means committees also sought assurances the error that resulted in thousands of incorrect 1099-G forms being sent to the wrong address — including others’ personally identifiable information — won’t happen again.
The language is being attached to the annual Budget Adjustment Act, which has already passed both the House and Senate. That bill is due to be taken up for a concurrence vote by the House on Wednesday.
Both committees endorsed the proposed change by unanimous vote.
Under state statute, data collected by the tax department cannot be shared with other departments, except under specific circumstances cited in the law. That’s an issue because the Department of Labor, in working to make sure there are no glitches, wants to cross-check the affected forms with data from the Tax Department.
Brittney Wilson, the deputy chief of staff in Gov. Phil Scott’s administration and the point person on the administration’s response to the error, told the Appropriations Committee that permission to share the data was needed to make sure the corrected forms are as mistake-free as possible.
“Given the size and scope of what we’ve just been through and the initial mailing, it’s about going above and beyond to make sure we get it right,” Wilson told the Appropriations Committee. “Claimants are stressed out. They’re going to get their 1099s late.”
The Department of Labor is hoping to send out the corrected forms this week, Wilson said.
During that hearing with Wilson and state tax commissioner Craig Bolio, Rep. Kimberly Jessup, D-Washington 5, expressed concern about the Labor Department’s ability to handle the data, and asked if the state Agency of Digital Services was assisting the department.
“I have to say this morning that I have very little confidence right now in the capacity of the Department of Labor and I’m sorry to be so blunt,” Jessup said. “I’m struggling … we’re talking about analytical tools for a system that just hasn’t functioned.”
“The reality is we have some really outdated pieces of equipment,” Wilson replied, referring to the antiquated mainframe computer used by the state unemployment insurance program. She noted that other unemployment benefit programs, including Pandemic Unemployment Assistance, are running on more modern platforms.
“The Agency of Digital Services is embedded in every agency and they have been engaged and very helpful to the [Labor] department,” Wilson said in response. “But with outdated systems and a lot of manual labor it provides a ripe opportunity for error.”
Wilson and Bolio assured lawmakers in both committees that the amount of data being shared would be limited to that needing correction, and that the departments had the means to transfer the data safely and securely.
The Department of Labor has recalled thousands of 1099-G forms because incorrect names and Social Security numbers were sent to the wrong claimants in two pandemic-related unemployment programs.
The error, believed to have resulted from manually moving data into a spreadsheet for mailing, has resulted in the state committing to provide identity theft protection for all unemployment insurance claimants.
As Bolio told both committees, the Labor Department had already shared its data with the Tax Department for a risk assessment. The study showed between 4 percent and 7 percent of the claimant information needed corrections — usually attributed to entry error by employers and claimants, or outdated information such as marriage change of names.
“They were able to run a match to see if names matched social security numbers,” Wilson told the Ways & Means Committee. “Because of the law they can’t provide specifics.”
No data was shared back, Bolio assured lawmakers. But it’s cued up and ready to go as soon as authority to share the information is signed into law, he said.