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Hi Amanda!

Thanks for your question! The is.....it depends.

For federal purposes, you must look at the other income on your tax return and determine whether your total income is greater than the standard/itemized deduction. For example in 2021, if you're single, and your unemployment + other income is less than the standard deduction of $12,550, you wouldn't owe any tax on your unemployment. However, if your total income exceeds $12,550, then your unemployment would be taxed at the regular tax brackets. For 2021, the federal government hasn't said yet whether they will exclude any unemployment compensation from adjusted gross income, so for now, I would include all unemployment when determining your total income. 

Since most states and localities start with the federal taxable income, in most cases, the amount of unemployment taxable at the federal level will also be taxable at the state/local level.  However, each state's tax law will determine whether it is taxed or not. For example California does not tax unemployment at all, but many states do.  Check out this article to see how unemployment is taxed in your state and locality. 

Please let me know if you have any more specific questions for me. I'd be happy to assist you. 

Thanks,

Akil C