Are Unemployment Benefits Taxable?

Any unemployment benefits you receive are fully taxable by the federal government if you are required to file a tax return. You may choose to have federal tax withheld when benefits are paid. You make the choice when you file your initial claim or at any time during your claim. The federal tax withheld will be withheld at a rate of 10% of the amount you would have received. You will be sent Form 1099­G, by the end of January, which shows unemployment benefits paid to you and any taxes withheld in the previous tax year. The IRS will receive the same information.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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