How to File Taxes on Unemployment

In most states, unemployment income is taxed just like any other income. Each state has their own requirements and regulations on how unemployment taxes are processed and paid. If your income exceeds the amount that you are required to pay in taxes for your filing status, you must pay the difference when filing your taxes.

When you filed for unemployment you made a choice on whether or not you wanted to have taxes withheld or not. At the end of the tax year, you will receive a Form 1099-G from the state you reside in. This form will show how much was withheld and how much you received in income.

There are several ways to file taxes. You can go to an accountant, a tax preparation service, or use one of the many online services available such as Turbo Tax or TaxCut. Most forms can be downloaded at www.irs.gov.

All income for the year will need to be provided including income from a spouse, if filing jointly, or any other income earned throughout the year. Unemployment income does not count towards the Earned Income Credit, so you will only be eligible for the usual deductions.

Once the tax forms are complete, you will need to either pay the taxes owed or request a refund in the event of overpayment.