Unemployment compensation is taxable income. If you receive unemployment benefits, you generally must include the payments in your income when you file your federal income tax return. Check If Your Unemployment Compensation Is Taxable Report Unemployment Compensation Exclusion for Tax Year 2020 Only Pay Taxes on Unemployment Compensation Report Unemployment Fraud More Information Check if your unemployment compensation is taxable Some types of unemployment compensation are taxed differently based on the program paying the benefits. Use our Interactive Tax Assistant tool to see if your unemployment compensation is taxable. For more information, see Publication 525, Taxable and Nontaxable Income. Report unemployment compensation You should receive Form 1099-G, Certain Government Payments, showing the amount of unemployment compensation paid to you during the year. To report unemployment compensation on your 2021 tax return: Enter the unemployment compensation amount from Form 1099-G Box 1 on line 7 of Schedule 1, (Form 1040), Additional Income and Adjustments to Income PDF Enter the amount of tax withheld from Form 1099-G Box 4 on line 25b of your Form 1040 or Form 1040-SR Attach Schedule 1 to your return If you received unemployment compensation but didn't get Form 1099-G in the mail, find the amount of your payments on your state unemployment agency website. Exclusion for tax year 2020 only You can exclude unemployment compensation of up to $10,200 for tax year 2020 under The American Rescue Plan Act of 2021. See Exclusion of up to $10,200 of Unemployment Compensation. Find more information: 2020 Unemployment Compensation Exclusion FAQs Tax Treatment of 2020 Unemployment Compensation Pay taxes on unemployment compensation To pay tax on unemployment compensation, you can: Submit Form W-4V, Voluntary Withholding Request to the payer to have federal income tax withheld or Make quarterly estimated tax payments Not sure which is best for you? See Publication 505, Tax Withholding and Estimated Tax Find information about tax withholding Report unemployment fraud If you receive Form 1099-G showing the wrong amount of unemployment compensation, contact your state unemployment agency to correct it. If you believe someone fraudulently collected unemployment payments using your information, take these steps to report it and protect yourself. Find more information about identity theft and unemployment benefits. More information Publication 525, Taxable and Nontaxable Income Tax Topic 418, Unemployment Compensation
