unemployment/disability/new job

[lizkastner1750]

In 2021 I was on UI, then Disability, then back to UI. This created a lot of red flags, but I think it got straightened out. I have not worked since Jan 15, 2021. I have been offered a full-time position today. I should start onboarding this week. My 2020 taxes were messed up because of some 1099, and I ended up owing quite a bit of money. I want to make sure things go smoothly this year. What do I need to know about taking this new job, and how are the UI/Disability payments going to affect my taxes?

[OpeA1]

Hello  lizkastner1750!

The best way to track all the issues with the upcoming tax year is to use our tool Tax Caster to help you estimate what your taxes may be next year. Here is a link to the tool and it is free!

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/ 

Thank you for using TurboTax!

[melj1]

We want to thank you for participating in experts. I will try to answer your question.

SDI benefits are taxable only if paid as a substitute for unemployment insurance (UI) benefits. When SDI benefits are received as a substitute for UI benefits, This is likely not the case but, you would receive a 1099 in January if the is the case.

Unemployment benefits were tax free in 2020. Do not expect that in 2021. You should receive a 1099-G in January and that will need to be entered on your tax return.

The new job should provide you a W-2 in January and needs to included on you tax return.

Congratulations and good luck with your new position.