You do not have a choice. The unemployment is taxable income that has to be entered on your 2020 return.
UNEMPLOYMENT COMPENSATION
Unemployment compensation is taxable on your federal return.
You will have to enter a 1099G that is issued by your state.
Some states will mail out the 1099G. Or you might need to go to your state’s unemployment website and use the password, etc. that you have been using to certify for weekly benefits to get your 1099G from the state’s site.
Enter your 1099G in Federal>Wages & Income>Unemployment
Go through the screens very carefully, making sure to enter any federal/state tax you had withheld from the unemployment.
https://ttlc.intuit.com/community/entering-importing/help/where-do-i-report-a-1099-g-for-unemploymen...
STATES THAT TAX UNEMPLOYMENT BENEFITS
AZ, AR, CO, CT,, DC, GA, HI, ID, IL, IN, IA, KS, KY, LA, MA, ME, MD, MI, MN, MS, MO, NB, NM, NY,NC, ND, OH, OK, OR, RI, SC, UT, VT, WV, WI
STATES THAT DO NOT TAX UNEMPLOYMENT BENEFITS on the state return
AK, CA, DE, FL, MT, NH, NJ, NV ,PA, SD, TN, TX, VA, WA, WY
https://ttlc.intuit.com/community/personal-income-taxes/help/how-does-receiving-unemployment-affect-...
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
