We investigate the effect of on-site Coulomb interactions on the structural and magnetic ground state of C-20 fullerene based on density-functional-theory calculations within the local density approximation (LDA) plus on-site Coulomb corrections (LDA+U). The total energies of the high symmetry (I-h) and the distorted (D-3d) structures of C-20 are calculated for different spin configurations. The ground state configurations are found to depend on the forms of exchange-correlation potentials and the on-site Coulomb interaction parameter U, reflecting the subtle nature of the competition between Jahn-Teller distortion and magnetic instability in the C-20 fullerene. While the nonmagnetic state of the distorted D-3d structure is robust for small U, a magnetic ground state of the undistorted I-h structure emerges for U larger than 4 eV when the LDA exchange-correlation potential is employed.