You may get a refund, but only if you had taxes withheld from your unemployment payments or if your total income was low enough that you overpaid

Whether you receive a tax refund depends on two things: whether you asked to have federal income tax withheld from your unemployment checks, and whether your total income for the year — including unemployment — pushed you into a tax bracket where you owe money. If you did not request withholding and your unemployment was your only income, you likely will not owe taxes, but you also will not get a refund. If you requested withholding, you may get money back. If you had other income (wages, self-employment, interest), you may owe taxes on the combination, or you may have overpaid and receive a refund.

The key document is your 1099-G form, which your state unemployment office sends you by January 31 each year. This form shows how much unemployment you received and how much federal tax was withheld. You report this on your federal tax return using Form 1040. The IRS then calculates whether you owe, break even, or get money back.

Key Takeaways

  • You receive a 1099-G from your state unemployment office showing total benefits paid and federal tax withheld, which you must report on your tax return.
  • If you did not request withholding when you filed for unemployment, no federal tax was taken out, and you may owe money instead of getting a refund.
  • If you requested withholding, the amount withheld appears on your 1099-G, and you may get a refund if more was withheld than you actually owe.
  • Your total income for the year — not just unemployment — determines your tax liability, so wages, self-employment income, or other sources affect whether you get a refund.
  • You report unemployment income on Form 1040 when you file your federal tax return, and the IRS processes any refund within weeks of acceptance.

How withholding affects your refund

When you first filed for unemployment, you had the option to request that your state withhold federal income tax from each payment. If you chose withholding, your state deducted a percentage (usually 10 percent) from every check and sent it to the IRS on your behalf. This money counts as a payment toward your tax liability for the year.

If you did not request withholding, nothing was taken out. This means you kept the full unemployment amount each week, but you may owe the full tax on it when you file. Many people do not request withholding because they assume unemployment is not taxable — it is, and it is taxed as ordinary income at your regular rate.

The amount withheld appears on your 1099-G in Box 4 (federal income tax withheld). When you file your return, the IRS compares what was withheld to what you actually owe. If more was withheld than you owe, you get the difference back as a refund. If less was withheld, you owe the difference.

When your total income determines the refund

Unemployment is taxed as income, but the amount of tax you owe depends on your total income for the year and your filing status. If unemployment was your only income and it was below a certain threshold, you may not owe any federal tax at all — even without withholding. For 2024, that threshold is $14,600 for a single filer and $29,200 for married filing jointly, though these numbers change each year.

If you had other income — wages from a job, self-employment income, interest, or capital gains — your total income is higher, and you may owe tax on the combination. In this case, withholding from unemployment helps reduce what you owe. If you had wages withheld from a job and also requested withholding from unemployment, the total withholding from both sources is compared against your total tax liability.

Example: You received $8,000 in unemployment with 10 percent withheld ($800), and you earned $20,000 in wages with $2,500 withheld. Your total income is $28,000. Depending on your filing status and deductions, you might owe $3,000 in total tax. You had $3,300 withheld, so you would get a $300 refund.

The 1099-G form and what it shows

Your state unemployment office mails a 1099-G to you and files a copy with the IRS by January 31. This form has several boxes: Box 1 shows total unemployment benefits paid to you, Box 2 shows federal income tax withheld, and Box 5 shows the state where you filed. Some states also report state income tax withheld in Box 3.

You need this form to file your federal return. If you do not receive it by early February, contact your state unemployment office — they can reissue it or provide a transcript. Do not file your return without it; the IRS will match your reported income to the 1099-G they received from the state, and mismatches trigger notices.

Keep your 1099-G with your tax records for at least three years. If the IRS questions your return, you will need to show that the income and withholding match what the state reported.

Reporting unemployment on your tax return

You report unemployment income on Form 1040, the main federal income tax form. The line for unemployment income is clearly marked, and you enter the total from Box 1 of your 1099-G. You also enter the federal withholding amount from Box 2 in the withholding section of the form.

If you use tax software, it will prompt you to enter the 1099-G information, and the software calculates your tax liability automatically. If you file by paper or with a tax preparer, they will enter the amounts in the correct places. Either way, the process is straightforward: the form tells you where to put each number.

Once you file, the IRS processes your return and compares your withholding to your total tax liability. If you overpaid, they issue a refund. If you underpaid, they send a bill. Refunds typically arrive within 21 days of the IRS accepting your return, though it can take longer during peak filing season.

State tax refunds and unemployment

Some states also tax unemployment income and allow withholding. If your state does, the amount withheld appears on your 1099-G in Box 3. You report this on your state income tax return using your state's form (not the federal form). State refunds follow the same logic as federal refunds: if more was withheld than you owe, you get money back.

A few states do not tax unemployment at all — you can find your state's rule on your state tax authority's website. If your state does not tax unemployment, you do not file state income tax on that income, and you do not get a state refund related to it. Federal tax still applies regardless of your state's rule.

What to do if you did not request withholding

If you received unemployment without requesting withholding, you still must report it on your tax return. The IRS receives a copy of your 1099-G from the state, so they know you received it. If you do not report it, the IRS will send you a notice.

When you file, calculate your tax liability on your total income including unemployment. If your income was low enough that you do not owe tax, you will not owe anything and will not get a refund. If your income was higher, you will owe tax on the unemployment portion. You can pay this when you file, or if you cannot pay in full, the IRS offers payment plans.

For future years, you can request withholding when you file for unemployment or change your withholding request while you are receiving benefits. This spreads the tax payment across your checks instead of owing it all at once when you file.

Frequently Asked Questions

Do I have to report unemployment income if I did not have taxes withheld?

Yes. Unemployment is taxable income whether or not you requested withholding. You must report it on your Form 1040. The IRS receives a copy of your 1099-G from your state, so they know you received it. Not reporting it triggers an IRS notice.

Can I change my withholding request after I have already received benefits?

Yes, in most states. You can contact your state unemployment office and request to start or stop withholding on future payments. The change usually takes effect within one or two weeks. Withholding changes do not affect payments you have already received.

What if I lost my 1099-G?

Contact your state unemployment office and request a duplicate or a transcript. They can reissue the form or provide a statement showing the same information. You need this document to file your return accurately and to match the IRS's records.

If I get a refund, when will I receive it?

The IRS typically issues refunds within 21 days of accepting your return, though processing can take longer during peak tax season (February through April). You can track your refund status on the IRS website using your Social Security number and filing status.

Can I owe taxes on unemployment even if I requested withholding?

Yes, if the withholding was not enough. The 10 percent standard withholding is an estimate and may not cover your full tax liability, especially if you had other income. When you file, if your total tax owed is more than what was withheld, you owe the difference.