If you lost your job, you may qualify for unemployment benefits. These benefits may be taxable. Facts about unemployment compensation:
- Unemployment is taxable and you need to include all unemployment compensation as income. You should receive Form 1099-G, Certain Government Payments. This form will show the amount paid to you and the amount of any federal income tax withheld.
- There are various types of unemployment compensation. Unemployment includes amounts paid under U.S. or state unemployment compensation laws.
- Union Benefits May be Taxable and you should include benefits paid to you from regular union dues in your income. Other rules may apply if you contributed to a special union fund and your contributions to the fund are not deductible.
- You can choose to have federal income tax withheld from your unemployment. If you choose to not have tax withheld, you should make estimated tax payments.
