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The IRS considers unemployment compensation to be taxable income—which means you have to report it on your tax return. Your Form 1099-G from your state reports the amount of unemployment income you received this year. Use it to enter your income, and we’ll figure out how to report it on both your federal and state taxes. Here are some things to know about unemployment income and taxes.
1. Your 1099-G tells you how much income you received and how much tax you paidState unemployment divisions issue an IRS Form 1099-G to every person who gets unemployment benefits during the year. Take a look at yours. Box 1 shows the total amount of your compensation. If you chose to have income tax withheld, your total federal tax withheld will be in box 4, and your total state tax withheld will be in box 11.
2. Your state might not tax your unemployment incomeWhile the federal government considers unemployment as taxable income, not all states do. That means that your state might not impose an income tax on the compensation you received this year. Just enter your Form 1099-G, and we’ll determine whether or not you need to pay any state income tax.
