I recently was laid off (2010) and to file for unemployment they wanted all my info for 2009. I was working contract work for part of 2009 (mostly unemployed for the rest of the yr). I sent in a copy of my 1099 (since they didn't have any of it on record and with out it I didn't make the minimum to get unemployment). The employer who I work contract for just called basically pissed saying he might have to pay a fee now and back taxes. Is this correct? I had no idea and only thought unemployment needed the 1099 as proof of work... If this is true is there anything I can do to change this since he is also a friend?. I live in Colorado in case its different by state.

Hello w:

If you were a contract worker, and were paid that way, then your friend/employer wouldn't have to change a thing. But, if he was paying contract rates to avoid paying taxes and unemployment insurance, then he's going to have to change. In either case, you can't change anything - ESPECIALLY if you want to get your unemployment checks.

excon

1099 employees and employers do not pay into Unemployment; therefore, there are no Unemployment benefits when they are laid off (according to my research).

Excon is right - if you and/or your employer were avoiding taxes by incorrectly calling you a "1099" employee there are penalties and fees.