You must report unemployment as income on your federal tax return, even though no federal tax was withheld
Unemployment benefits count as taxable income to the IRS. You report them on your federal return using Form 1040 and Schedule 1. The amount you received appears on a Form 1099-G that your state unemployment office sends you by January 31 each year. You are required to include this income whether or not you received a 1099-G in the mail — if you were paid, it is taxable.
Some people choose to have taxes withheld from their unemployment checks while receiving them. If you did, you will see the amount withheld on your 1099-G as well. This reduces what you owe at tax time but does not change the fact that you must report the full benefit amount as income.
State taxes on unemployment vary. Some states do not tax unemployment income at all. Others tax it like regular income. A few tax it only partially. You will need to check your state's rules and report accordingly on your state return.
Key Takeaways
- Unemployment benefits are taxable federal income and must be reported on Form 1040 and Schedule 1, even if no tax was withheld.
- Your state unemployment office sends Form 1099-G by January 31, showing the total benefits you received and any federal tax already withheld.
- You report the full benefit amount as income on line 19 of Schedule 1, regardless of whether you received a 1099-G.
- State tax treatment of unemployment varies — some states do not tax it, while others tax it as regular income or partially.
- If you had taxes withheld from your benefits, that amount appears on your 1099-G and reduces your tax bill, but you still report the full benefit amount as income.
Where unemployment income goes on your federal return
On Form 1040, unemployment benefits go on Schedule 1, line 19. You enter the total amount from your 1099-G in the space for "Unemployment compensation." This amount then transfers to line 8 of your Form 1040.
If you had federal income tax withheld from your unemployment checks, that withholding amount also appears on your 1099-G. You report the withholding on Form 1040 as a payment toward your tax liability. The withholding reduces what you owe or increases your refund, but it does not change the fact that you must report the full benefit amount as income.
You cannot deduct unemployment benefits or reduce them on your return. The full amount is counted as income, period. Some people mistakenly try to claim unemployment as a loss or deduction — the IRS does not allow this.
Understanding Form 1099-G and what it shows
Form 1099-G is the official record of your unemployment benefits for the tax year. Your state unemployment office is required to send it to you and to the IRS by January 31. The form shows four key pieces of information: the total unemployment benefits you received (box 1a), any federal income tax withheld (box 4), any state income tax withheld (box 5), and your state unemployment account number.
Box 1a is the number you report on Schedule 1, line 19. If you do not receive a 1099-G by early February, contact your state unemployment office directly — they can tell you whether it was mailed and can provide a copy or the information you need to file. Do not wait for the form to arrive if you know you received benefits; you are still required to report the income.
If the 1099-G shows an incorrect amount, contact your state unemployment office to request a corrected form (usually called an amended 1099-G). Once you receive the corrected form, you may need to file an amended federal return if you already filed.
Withholding taxes from unemployment while you receive benefits
When you first file for unemployment, most states offer you the option to have federal income tax withheld from your weekly or biweekly benefit payment. The standard withholding rate is 10 percent of your benefit amount. This is optional — you can choose to have taxes withheld or not.
Choosing withholding does not change how much income you report. It only changes how much tax you pay during the year versus at tax time. If you withhold, you pay some tax as you receive benefits. If you do not withhold, you pay the full tax bill when you file your return. Either way, you report the full benefit amount as income.
Some people withhold because they know they will owe taxes and prefer to pay gradually. Others do not withhold because they expect a refund or because the 10 percent rate does not match their actual tax liability. There is no right answer — it depends on your situation and preference.
State unemployment tax treatment and your state return
How you report unemployment on your state return depends on your state's tax law. As of now, these states do not tax unemployment benefits at all: Alabama, Alaska, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of these states, you do not report unemployment income on your state return.
All other states tax unemployment as income. Some tax it at your regular income tax rate. Others explore a different rate or tax only a portion of the benefit. You will need to check your specific state's instructions or contact your state tax authority to know exactly how to report it. Your state return instructions usually include a line for unemployment income or direct you to a specific schedule.
If you moved during the year or received unemployment from more than one state, the rules become more complex. Each state where you received benefits may require you to report that income on its return. Some states have agreements to avoid double taxation, but you still need to report correctly in each state where you worked or received benefits.
What to do if you owe taxes on unemployment income
If you did not have taxes withheld and your total income pushes you into a higher tax bracket, you may owe money when you file. The amount depends on your total income for the year, your filing status, and any deductions or credits you claim. There is no way to know exactly what you will owe until you complete your return.
If you owe, you can pay the full amount with your return, or you can set up a payment plan with the IRS if you cannot pay in full. The IRS offers short-term payment plans (up to 180 days) at no cost and long-term plans with a setup fee. You can set up a plan online at IRS.gov or by calling the IRS at 1-800-829-1040.
If you think you will owe a large amount, you can file your return early and pay what you can now, then arrange a plan for the rest. Paying something before the tax important date reduces penalties and interest on what remains unpaid.
Frequently Asked Questions
Do I have to file a tax return if I only received unemployment?
It depends on the total amount. For 2024, if your only income was unemployment benefits, you must file if your benefits exceeded $13,850 (if you are single) or $27,700 (if you are married filing jointly). However, filing even if you do not have to can be worthwhile — you may be owed a refund if taxes were withheld or if you may have access to for credits like the Earned Income Tax Credit.
What if I received unemployment from two different states in the same year?
You report all unemployment income on your federal return. On Schedule 1, line 19, you enter the total from all states combined. On your state returns, you report only the unemployment you received in that state. Some states have reciprocal agreements, but you still file in each state where you earned income or received benefits.
Can I amend my return if I forgot to report unemployment income?
Yes. File Form 1040-X (Amended U.S. Individual Income Tax Return) with the correct information. You have three years from the original due date to amend and claim a refund, but the IRS can assess additional tax at any time if you underreported income. Amend as soon as you realize the error.
Will unemployment benefits affect my refund or tax credits?
Unemployment counts as income, so it can reduce or eliminate some tax credits like the Earned Income Tax Credit (EITC) or the Child Tax Credit, depending on your total income. It can also push you into a higher tax bracket. The exact effect depends on your full tax picture — run through your return to see the impact.
What if the amount on my 1099-G is wrong?
Contact your state unemployment office and ask for a corrected 1099-G. Provide details about what is incorrect — whether the total is wrong, the withholding is wrong, or something else. Once you receive the corrected form, file an amended return if you already filed with the incorrect amount.