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Are Unemployment Benefits Taxable?

The Tax Reform Act of 1986 has made Unemployment Insurance benefits fully taxable. You will be furnished a statement, Form 1099­UC or the equivalent, at the end of the year of benefits paid to you. The Internal Revenue Service will be given the same information.

You may choose to have 10% of your unemployment payment withheld for Federal Income Tax. You will be permitted to change a previously selected option. You may change this option by reporting to your Unemployment Insurance office. For more information about withholding or estimated tax, you can obtain a copy of Publication 505, "Tax Withholding and Estimated Tax," by calling your local IRS office.

Other Mississippi Labor and Employment FAQs

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