The IRS considers unemployment compensation to be taxable income that you'll need to report on your federal tax return. State unemployment divisions issue an IRS Form 1099-G to each individual who receives unemployment benefits during the year.
TABLE OF CONTENTS
Unemployment compensation is a form of monetary assistance provided by the federal and state governments to people who are out of work. These benefits are mostly funded by taxes that are paid by employers at the federal and state levels.
If you received unemployment benefits this year, you can expect to receive a Form 1099-G “Certain Government Payments” that lists the total amount of compensation you received. The IRS considers unemployment compensation to be taxable income—and requires that it be reported on your federal tax return. Some states also count unemployment benefits as taxable income.
Generally, employees who are laid off or who lose their jobs through no fault of their own typically qualify for unemployment benefits. Taxpayers who want to receive unemployment compensation can apply for benefits through their state programs. The amount of compensation they receive typically depends on:
Unemployment benefits are included along with your other income such as wages, salaries, and bank interest (For tax year 2020, the first $10,200 of unemployment income was tax free for taxpayers with an AGI of less than $150,000 regardless of filing status). The total amount of income you receive, including your unemployment benefits, and your filing status determines if you need to file a tax return.
Use the TurboTax Unemployment Center to learn more about unemployment benefits, insurance, and eligibility.
If you forget to report unemployment income, you could face penalties. To avoid penalties, you should file an amended tax return.
To amend your tax return, use Form 1040-X. When filing your amended return, you’ll need to include Form 1099-G.
State unemployment divisions issue an IRS Form 1099-G to each individual who receives unemployment benefits during the year. On this form, you’ll see the total amount of your compensation reported in Box 1.
When you receive benefits, you can usually choose to have income taxes withheld from your compensation to avoid owing a large amount of tax on your tax returns. If you choose to have income tax withheld from your benefits,
Typically, you should receive your 1099-G by January 31.
Some states will automatically send Form 1099-G via mail, while others will deliver the form based on the delivery option you’ve selected.
If you’ve chosen to receive your 1099-G electronically, you can find it on your state’s unemployment agency website.
If you haven’t received Form 1099-G, or you’ve lost the one that was sent to you, you can view that information on your state’s unemployment agency website. Once you log in, you should be able to request another one.
If the unemployment income is incorrect on Form 1099-G, you may be able to correct it by reaching out to your state’s unemployment agency. Once you’ve contacted them, they can issue a corrected Form 1099-G and update the IRS.
If you’ve received an incorrect Form 1099-G or you received one even though you didn’t claim unemployment benefits, you might be a victim of unemployment fraud.
If you think you’ve been a victim of unemployment identity fraud, you’ll need to report it to your state’s unemployment agency. They’ll handle corrections, but in the meantime, you can:
You report your unemployment compensation on Schedule 1 of your federal tax return in the Additional Income section. The amount will be carried to the main Form 1040. Remember to keep all of your forms, including any 1099-G form you receive, with your tax records.
If you use TurboTax to file your taxes, we’ll ask about your unemployment income and put the information in all the right tax forms for you.
TurboTax is here to help with our Unemployment Benefits Center. Learn more about unemployment benefits, insurance, eligibility and get your tax and financial questions answered.
Use your Intuit Account to sign in to TurboTax . By selecting Sign in, you agree to our Terms and acknowledge our Privacy Statement . New to Intuit? Create an accountTaxes done right,
with experts by your side
Get unlimited advice, an expert final review and your maximum refund, guaranteed.
Start for free100% free filing.
Max refund guarantee. $0
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
Estimate your tax refund and where you stand
I’m a TurboTax customer
Easily calculate your tax rate to make smart financial decisions
Know how much to withhold from your paycheck to get a bigger refund
Estimate your self-employment tax and eliminate any surprises
Estimate capital gains, losses, and taxes for cryptocurrency sales
Find deductions as a 1099 contractor, freelancer, creator, or if you have a side gig
See how much your charitable donations are worth
A Form 1040 return with limited credits is one that's filed using IRS Form 1040 only (with the exception of the specific covered situations described below). Roughly 37% of taxpayers are eligible.
If you have a Form 1040 return and are claiming limited credits only, you can file for free yourself with TurboTax Free Edition, or you can file with TurboTax Live Assisted Basic or TurboTax Full Service at the listed price.
Situations not covered:
TurboTax Individual Returns:
TurboTax Business Returns:
