Free Tax Course

Unemployment Compensation Tax

What is unemployment compensation?

Unemployment compensation includes benefits to unemployed individuals that a state or the District of Columbia paid from the Federal Unemployment Trust Fund.

How is unemployment compensation reported for tax purposes?

Unemployment compensation is reported to you on Form 1099-G, Certain Government Payments. You must include in your income all unemployment compensation you receive and report it on line 19 of the tax form 1040.

Unemployment Compensation Tax

Do I have to pay tax on unemployment compensation?

Yes. If you have not repaid the unemployment compensation, then you must enter the amount of unemployment compensation on the tax form 1040 line 19, Unemployment Compensation.

How do I claim unemployment compensation on my tax return?

If you repaid in the current tax year, unemployment compensation that you received in the same year, subtract the amount you repaid from the total amount received and enter the difference on line 19 of the form 1040.

Enter "repaid" and the amount repaid on the doted line next to the entry.

Amounts of unemployment compensation repaid in the tax year that were included as income an earlier year can be deducted on Schedule A if you itemize deductions.



Looking for more IRS Deductions?