Generally, unemployment income is considered taxable income and is reported on your federal tax return. Whether you also have to report this income on your state tax return depends on your particular state. In the Wages & Income section of TurboTax is where you would have entered your unemployment compensation information, including the amount you received and your withholding. Review those entries again, and make whatever changes are necessary. If you entered everything correctly, then there is nothing else to do but file your return.
You may recall that certain pandemic-era relief laws changed, for a period of time, how unemployment compensation would be treated for tax purposes. In March 2021, under the American Rescue Plan, the first $10,200 in unemployment benefits collected in the tax year 2020 were not subject to federal tax. To have qualified for the exclusion, a taxpayer needed a modified adjusted gross income of less than $150,000. The modified AGI limit included benefits plus any other sources of income. A taxpayer claimed the exclusion when filing 2020 taxes during 2021.
Unfortunately, the previous unemployment income federal tax exclusion does not include unemployment income for 2021.
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