Are Unemployment Insurance Benefits Taxable?

Unemployment benefits are considered taxable income for both Federal and State Income Tax purposes. In most cases no income tax is deducted from your payment until a release form with your signature is received. You may elect to withhold federal income taxes, federal and North Dakota income taxes, or no taxes. If you choose withholding, Federal income taxes will be withheld at a 10% rate. North Dakota income tax is 2%. This means that a total of 12% will be withheld from the payments of those applicants who elect the Federal and State withholding option. You are responsible for any tax liability owed on these benefits.

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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