Do I Pay Taxes on Pennsylvania Unemployment Benefits?
As of 2011, while you do have to pay federal taxes on unemployment compensation received from Pennsylvania, you do not have to pay state or local taxes on these benefits. Unemployment compensation from Pennsylvania is considered taxable income by the federal Internal Revenue Service and must be reported as income on your federal tax returns.
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Federal Taxes
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The IRS requires paying federal taxes on your Pennsylvania unemployment benefits. You may not owe taxes if you have requested that taxes be taken out of your biweekly Pennsylvania unemployment compensation. However, many residents need the full pay and cannot afford to deduct money for taxes when they are not working. Should you get a job, you may want to consider making estimated quarterly tax payments to avoid owing taxes in April.
Tax Deductions
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Per federal and Pennsylvania regulations, you can elect to have up to 10 percent of your weekly Pennsylvania unemployment withheld for tax purposes. You may elect a higher amount if you have dependents. The 10 percent is deducted from the unemployment benefit amount before other deductions, such as child support. When you file your initial claim, inform the representative you wish to have this deduction. Not paying federal taxes on your Pennsylvania unemployment can lead to IRS penalties.
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Applying for Pennsylvania Unemployment
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To file an initial Pennsylvania unemployment claim, you can call 888-313-7284 or visit the Pennsylvania Department of Labor and Industry's website. If filing by phone, you talk to a representative who will ask you a series of questions about your employment status, including the reason and date of separation from your job. If applying online, visit the unemployment compensation area of the website and click "File an Initial Claim." To file ongoing claims, you must file by phone or online biweekly for each week you did not work full-time. You must report any work you did during those two weeks.
UC-1099-G Statements
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Pennsylvania mails tax form UC-1099-G each January to anyone who received unemployment compensation from the state during the prior calendar year. The 1099-G statements show the amount of unemployment you received and the amount of tax withheld, if any. To obtain a copy of your UC-1099G, you can call 888-255-4728 to request that a hard copy be mailed to you. You also can visit the Pennsylvania Department of Labor and Industry website to view an online copy. For prior years' statements, call 717-783-3140 to request copies.
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