Department of Labor and Regulation

Unemployment Insurance

Overpayments - Frequently Asked Questions

What penalties may apply to my overpayment?

Where do I send payments on my Unemployment Insurance (UI) overpayment?

What kind of payment is accepted for my Unemployment Insurance (UI) overpayment?

If I disagree with the amount I was held overpaid, how do I appeal or request a waiver?

If I had income tax withheld from my UI benefits and now I'm overpaid, do I have to pay back the amount deducted for income tax as well as the UI benefit amount?

Will my 1099G income tax form be adjusted since I was overpaid and I have to pay back the benefits that I received?

Will interest apply to my debt?

Can interest accrued on my overpayment be paid back with UI benefits?

What happens if I fail to pay back my overpayment?

When do I report my work and earnings, when worked or when paid?

If I have a current overpayment, can I still file a claim for Unemployment Insurance benefits?

Can I be prosecuted for not reporting my work and earnings?

What happens if an administrative penalty is imposed on my overpayment?

Will my overpayment be written off if I file bankruptcy?

Will my administrative penalty be removed if I file bankruptcy?

Why am I required to keep track of my job contacts?

Does interest accrue during the appeal process?

If I am filing for benefits, can my overpayment be paid back with current benefits if an appeal is in process?

What penalties may apply to my overpayment?

If you commit fraud to secure or increase benefits a penalty of 50 percent of the amount of benefits obtained by fraud is applied for the first offense and a 100 percent penalty is applied for each subsequent offense. The department shall also impose four weeks of administrative penalty for each week that an individual willfully or fraudulently misrepresents a fact to secure or increase benefits. There is no expiration of this penalty and benefits will be denied during this penalty period.

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Where do I send payments on my Unemployment Insurance (UI) overpayment?

Unemployment Insurance Division - Benefit Payment Control Unit
South Dakota Department of Labor and Regulation
P.O. Box 4730
Aberdeen, SD 57402-4730

Your file number must be included in all correspondence.

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What kind of payment is accepted for my Unemployment Insurance (UI) overpayment?

We accept credit/debit cards, money orders and checks. You can pay by credit/debit card by contacting us at 605.626.7649. Or you may download the Credit Card Authorization form (in Adobe .pdf format*), complete it and return it to us at the address above. Money orders and checks can be sent to the address above.

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If I disagree with the amount I was held overpaid, how do I appeal or request a waiver?

The overpayment notice you receive by mail indicates your waiver and appeal rights. Please read the notice carefully and note the date it was mailed. Waivers and appeals can be accepted if made within 15 days after the notice was mailed. You must appeal in writing by mailing your appeal letter to the following address. Your appeal must include your file number and the reason for the appeal.

South Dakota Department of Labor and Regulation
Unemployment Insurance Benefits Appeals
P.O. Box 4730
Aberdeen, SD 57402-4730
Fax: 605.626.2232

For information about the appeals process, visit the UI Benefits Appeals portion of this website.

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If I had income tax withheld from my UI benefits and now I am overpaid, do I have to pay back the amount deducted for income tax as well as the UI benefit amount?

Yes. The income tax withholding was sent to the Internal Revenue Service. Although you must pay back to us all of the unemployment insurance benefits you received, you can get credit for the overpaid income tax on your federal income tax return. Remember to tell your tax professional that you paid an overpayment during the tax year.

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Will my 1099G income tax form be adjusted since I was overpaid and I have to pay back the benefits that I received?

Your 1099G form will not be adjusted. The 1099G reflects the total amount of UI benefits that you received during the calendar year and the amount of federal income tax that was withheld.

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Will interest apply to my debt?

If you are overpaid and you were at fault in the overpayment, interest will begin accumulating immediately at 12 percent simple interest per year. If you are not at fault, interest will begin accumulating after six months at 12 percent simple interest per year.

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Can interest accrued on my overpayment be paid back with UI benefits?

No, we are not allowed to use money set aside for unemployment insurance benefits to pay back the interest accrued for an overpayment. By federal law, money for unemployment insurance benefits can be used to pay actual benefits only including the principal for an overpayment.

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What happens if I fail to pay back my overpayment?

The Benefit Payment Control Unit has many options for collecting the overpayment.

If you file for benefits in the future, your benefits can be withheld to pay the overpayment.

Civil action including liens, distress warrants and wage garnishments can be taken.

For more information, see the Collections page.

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When do I report my work and earnings, when worked or when paid?

Work and earnings must be reported in the week that you actually do the work, even though you may not have been paid yet. Visit our Accurate and Honest Reporting page for more information.

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If I have a current overpayment, can I still file a claim for Unemployment Insurance benefits?

Yes. You can still file a claim. Visit the Filing a Claim page for information on how to file a claim.

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Can I be prosecuted for not reporting my work and earnings?

Yes. The Benefit Payment Control Unit investigates cases of fraud and prosecutes when appropriate. Visit the Prosecution of Offenders page for more information.

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What happens if an administrative penalty is imposed on my overpayment?

You cannot be paid any benefits until you have served the penalty by filing weekly certifications you would otherwise be paid for. There is no expiration of this penalty.

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Will my overpayment be written off if I file bankruptcy?

No. The overpayment principal will not be written off due to your bankruptcy. The principal can be recouped with future benefits on fraud overpayments. However, the accrued interest will be written off.

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Will my administrative penalty be removed if I file bankruptcy?

No. The administrative penalty will not be removed.

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Why am I required to keep track of my job contacts?

By law, you are required to keep a record of your contacts as instructed by UI Benefits. You are also required to produce that record on request. For more information, visit the UI Benefits portion of this website.

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Does interest accrue during the appeal process?

Yes. Interest will accrue during an appeal process. You will not receive monthly bills during the appeal process unless you owe money for a previous overpayment. Then you will receive monthly bills for that overpayment.

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If I am filing for benefits, can my overpayment be paid back with current benefits if an appeal is in process?

Yes. Your overpayment can be paid with current benefits provided you file weekly certifications and are otherwise eligible. If you win the appeal, you will be issued a payment to cover whatever benefits were used to pay the overpayment.

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*Opening and printing Adobe .pdf files requires Adobe Acrobat Reader. Click here as needed to download the free Adobe Acrobat Reader.


Marcia Hultman, Secretary
700 Governors Drive
Pierre, SD 57501-2291
Tel. 605.773.3101
Fax. 605.773.6184