Federal Tax, Tax

Unemployment Compensation is Taxable Income

If you’ve lost your job, keep in mind that any unemployment compensation you receive is taxable income. Unemployment benefit recipients generally must include the payments in their income when they file their federal tax returns. You should receive Form 1099-G, Certain Government Payments, showing the amount of unemployment compensation paid to you during the year. Many states also tax unemployment benefits. Note: A COVID-19 relief law allowed individual taxpayers to exclude up to $10,200 of unemployment compensation they received only for the 2020 tax year. This tax break wasn’t extended and no longer applies. Contact the Cg Team with questions. © 2023