Do You Have to Pay Taxes on Unemployment If You Have the Taxes Withheld From Check?
Unemployment benefits are paid by a state's employment security commission or employment development department. All monies received through unemployment insurance are taxable income. You can opt to have money withheld from your weekly unemployment checks to meet your expected tax obligation.
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Tax Obligation
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When an employer or employment security commission withholds state and federal income taxes, it is only an estimate of what your expected tax obligation will be. In many cases, you still must file state and federal income tax returns by April 15 of the following year. This is true even if you do not owe additional money in taxes. Whether you actually must pay any taxes above and beyond what has already been withheld can only be determined by completing a tax return.
Internal Revenue Service
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To inquire about the money you paid in income tax covering your unemployment benefits, visit your state's employment security commission website. Many states provide a link to look up information about your benefits. Click on the link and identify yourself with your Social Security number. Follow the onscreen directions to print your unemployment earnings and tax withholdings. This information is also provided in writing by your state's employment security commission at the start of the next tax year.
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Federal Income Taxes
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When filling out your federal income tax return, enter the sum total of income you earned through unemployment income for the past year. Frequently, you'll see earned income documented at the center of the 1099 tax form you receive covering your unemployment benefits. If you look further left, you'll see a column labeled "Federal tax withholdings." Enter this figure on your income tax return, too. Complete your federal income tax return as directed. The Internal Revenue Service accepts online and hardcopy tax returns.
State Income Taxes
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If you earn more than the threshold set by your state, you'll need to complete and file an income tax return. For example, in Oklahoma, individuals who earn more than $1,000 in unemployment insurance for the year must file a tax return. Visit your state's tax commission website to download and complete tax forms for your state. You'll need to report the income you earned through unemployment insurance for the past year and enter any state tax withholdings that were taken out. Only file a state income tax return if you meet minimum eligibility requirements. Find a list of filing requirement on your state's tax commission website.
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