The Ohio unemployment lawsuit that matters most right now is Bowling v. DeWine, a class action challenging Governor Mike DeWine’s decision to pull the state out of federal pandemic unemployment programs early. In June 2025, Ohio’s Tenth District Court of Appeals upheld a lower court order directing the state to pursue roughly $900 million in federal pandemic funds it never claimed. The case is now before the Ohio Supreme Court, which has agreed to hear the state’s appeal.
Where Bowling v. DeWine Stands
Three Ohio residents filed the class action in 2021 after Governor DeWine withdrew Ohio from the Federal Pandemic Unemployment Compensation program ahead of its scheduled federal expiration. The lead plaintiff, Candy Bowling, argued that Ohio law requires the governor to “secure” for residents “all available advantages” from federal programs, and that pulling out early violated that duty. The suit asked the court to force the state to re-enroll and recover the federal money left on the table.
Franklin County Common Pleas Judge Michael Holbrook ruled for the plaintiffs and ordered DeWine to re-enroll in the federal compensation fund. The state appealed. In a ruling dated June 30, 2025, the Tenth District Court of Appeals upheld Judge Holbrook’s order. The governor’s legal team had argued the case was moot because the federal funds were likely no longer available. The appeals court rejected that reasoning, writing that nothing established recovery was “impossible” and that the proper standard was whether recovery remained possible, not whether it was likely.
On July 2, 2025, attorneys for the workers filed a motion asking the court to compel the governor to take “all action necessary” to reclaim the funds within five days. The state then appealed to the Ohio Supreme Court, which agreed to take the case. The Supreme Court sits under 6-to-1 Republican control, and its lone Democratic justice voted against taking up the appeal.
What a Ruling Could Mean for Claimants
If the Ohio Supreme Court upholds the lower court orders, the state would be legally obligated to pursue recovery of the federal funds it declined. How that money would then reach affected claimants is an open question that would likely require further proceedings. If the court sides with the state, the money stays out of reach and the class action effectively ends.
The $3.4 Billion Overpayment Problem
Beyond Bowling, the other legal issue hitting individual Ohioans is overpayment collection. As of August 2021, the Ohio Department of Job and Family Services had identified nearly $3.4 billion in non-fraudulent overpayments issued since March 2020. Of that total, $586 million involved traditional unemployment claims, and roughly $2.8 billion came from the Pandemic Unemployment Assistance program.1Auditor of State of Ohio. Ohio Department of Job and Family Services Unemployment Compensation Performance Audit
Ohio distributed approximately $23.8 billion in benefits to more than 2.4 million claimants during the first 18 months of the pandemic, meaning roughly one dollar in seven went out as a non-fraudulent overpayment. Many claimants had no idea until a collection notice arrived, sometimes months after the money had gone to rent and groceries.
If you received an overpayment notice, your obligations turn on whether the state classified the overpayment as fraudulent or non-fraudulent.
Fraudulent Overpayments
If ODJFS finds you misrepresented facts to obtain benefits, the state must order full repayment. Interest begins accruing if you do not repay within 30 days of the order becoming final. The state also imposes a mandatory penalty equal to 25% of the total overpaid amount, and you become ineligible for two weeks of future benefits for every fraudulently claimed week. Ohio has six years from the date the repayment order becomes final to pursue collection through legal proceedings.2Ohio Legislative Service Commission. Ohio Code 4141.35 – Repayment of Benefits Fraudulently Obtained or Erroneously Paid
Non-Fraudulent Overpayments
For overpayments not caused by fraud, the rules are gentler. The state can order repayment or withhold the amount from future benefits, but there is no 25% penalty and no interest. The state has three years from the date the repayment order becomes final to recover the money. If it has not collected within that window, ORC 4141.35 requires ODJFS to stop pursuing the debt and cancel the balance as uncollectible.2Ohio Legislative Service Commission. Ohio Code 4141.35 – Repayment of Benefits Fraudulently Obtained or Erroneously Paid
There is also a significant carve-out. If the overpayment resulted from a clerical or typographical error by the ODJFS director, or from an error in an employer’s report, repayment is not required at all.2Ohio Legislative Service Commission. Ohio Code 4141.35 – Repayment of Benefits Fraudulently Obtained or Erroneously Paid The state auditor documented systemic technology failures and processing backlogs as drivers of the overpayment crisis, so this exception could apply to a large number of pandemic-era cases. Whether ODJFS has been applying it broadly is a different question, and one worth raising on appeal.
Ohio’s statute does not contain a broad “equity and good conscience” waiver of the kind the U.S. Department of Labor allows states to adopt for non-fraudulent overpayments.3U.S. Department of Labor, Employment & Training Administration. Unemployment Insurance Overpayment Waivers The clerical-error exception is the closest thing Ohio offers, and it is narrower.
How to Appeal an Overpayment or Denied Claim
You have 21 calendar days from the date the written determination was mailed to file an appeal with ODJFS.4Ohio Legislative Service Commission. Ohio Code 4141.281 – Appeal From Determination of Benefit Rights The deadline is firm. Missing it can cost you the right to challenge the decision. The first-level appeal is heard by a hearing officer.
If you lose at the first level, you can request a hearing before the Unemployment Compensation Review Commission within 21 days of that decision. From there, you can appeal to a court of common pleas within 30 days.4Ohio Legislative Service Commission. Ohio Code 4141.281 – Appeal From Determination of Benefit Rights
Two extensions exist. If a medical condition kept you from filing within 21 days, the deadline extends to 21 days after the condition ends. If you never actually received the determination within the appeal period, the clock resets to 21 days from when you did receive it. Both require evidence, though testimony from the claimant can suffice.4Ohio Legislative Service Commission. Ohio Code 4141.281 – Appeal From Determination of Benefit Rights
If you are fighting a pandemic-era overpayment, check first whether the state labeled it fraudulent, because that label triggers the 25% penalty and the longer six-year collection window. If you believe the overpayment came from a system error or an employer’s reporting mistake rather than anything you did, argue the statutory exception in ORC 4141.35 explicitly. It is the strongest tool for eliminating the debt outright.
Also check the calendar on any non-fraudulent overpayment order that became final more than three years ago. If ODJFS has not yet collected, the statute requires the balance to be canceled as uncollectible. Continued collection efforts past that point are themselves grounds for an appeal.
Taxes on Back Benefits or a Settlement Payment
Unemployment compensation is taxable at the federal level whether you got it on time or through a settlement years later. The IRS requires state agencies to report unemployment payments on Form 1099-G.5Internal Revenue Service. Instructions for Form 1099-G If Bowling v. DeWine ultimately results in payments to class members, expect that money on a 1099-G for the year you actually receive it.
A lump sum of back benefits in a single year can push you into a higher bracket, even when the benefits were owed across multiple prior years. No IRS provision lets you spread pandemic-era unemployment income across the years it was originally due. Recipients of any eventual payout should plan for the tax hit and set aside a portion for federal and Ohio state income taxes.
Attorney fees in class action cases involving government benefits are typically deducted from the total recovery before distributions reach individual claimants. Whether you can separately deduct those fees on your personal return depends on the nature of the claim and current tax law. For most individual taxpayers, the Tax Cuts and Jobs Act eliminated the miscellaneous itemized deduction for unreimbursed legal expenses through 2025. A tax professional can tell you how a specific payment will be reported and what deductions are available in your filing year.