Start For Free

Fast, Secure, and Always Accurate!

Back to List

Category: Questions about Income

Is Unemployment Taxable?

Yes. You must include all unemployment compensation received in the income you report on your taxes each year. You should receive a Form 1099-G, and the total unemployment paid to you will show in box 1. You can choose to have federal income tax withheld from your unemployment by completing Form W-4V, Voluntary Withholding Request and submitting it to your unemployment office. The taxes will be withheld at 10% of your payment. Additional state taxes may be necessary depending on where you live, so you should check with your individual state. For a copy of Form W-4V click here.


Repayment of Unemployment Compensation

If you repaid in the current tax year any unemployment compensation you received for the year, you can subtract the amount you repaid from the total amount received. You will make that entry in our program on the Income > Unemployment Compensation > Repayment screen. If the repayment was less than $3,000 enter it as an additional Miscellaneous Deduction. If greater than $3,000 it is claimed on the line for “Repayment under claim of right”. For further information see Publication 525.