Yes, your unemployment compensation is fully taxable by the federal government.
Where do I report Unemployment Compensation?
Unemployment Compensation is reported:
- Federal Section
- Income
- 1099-G Box 1
- Add or Edit a 1099-G
How do I report Unemployment Compensation that was repaid?
Unemployment received and repaid in same tax year- If you received unemployment income and repaid it in the same year, you can subtract the amount you repaid from the total amount received. You will make that entry in our program by going to:
- Federal Section
- Income
- 1099-G Box 1
- Repayment of Unemployment
Unemployment received in one year and repaid in a later tax year- If the repayment was made in the current tax year for a prior year where the unemployment compensation was claimed as income and it was:
-
less than $3,000 enter it here:
- Federal Section
- Deductions
- Itemized Deductions
- Other Itemized Deductions
- Add Additional
-
greater than $3,000 it is claimed here:
- Federal Section
- Deductions
- Itemized Deductions
- Other Itemized Deductions
- Repayment under claim of right (if greater than $3000).
You may choose to have federal income tax withheld from your unemployment by completing Form W-4V, Voluntary Withholding Request and submitting it to your unemployment office. The taxes will be withheld at 10% of your payment. Additional state taxes may be necessary depending on where you live, so you should check with your individual state.
For further information see Publication 525
If you received any unemployment compensation you will typically receive Form 1099-G, with income reported in box 1.