why did my refund reduce after entering my unemployment insurance income even though federal taxes were withheld

[MinhT1]

Unemployment income is taxable.

Tax withheld on the unemployment income is just an estimated advance payment of your taxes. The final tax amount can only be determined when you fill out your tax return with all your income. The taxes withheld serve as a credit against your tax liability. If too much tax was withheld, you'll receive an addition to your refund; otherwise, there'll be a tax due on the income, reducing your refund.