The forms you receive depend on how much you were paid and which state processed your claim

When you receive unemployment benefits, the state that paid you will send you tax documents by the end of January the following year. The form you get — either a 1099-G or a W-2G — reports what you were paid so you can include it on your tax return. The specific form and what it covers varies by state and by the type of benefits you drew.

You do not have to do anything to receive these forms. The state's unemployment office mails them automatically to the address on file with your claim. If you moved during or after your claim, update your address with the state unemployment office as soon as possible, or the form may go to an old address and you will have to request a replacement.

Unemployment benefits are taxable income in all states except a few specific situations (such as certain pandemic-related payments that were temporarily excluded). This means you owe federal income tax on what you received, and possibly state income tax as well, depending on where you live and where you filed your claim.

Key Takeaways

  • Most states send a 1099-G form by January 31 that reports all unemployment benefits paid to you during the previous year.
  • Some states use a W-2G form instead, which is less common but serves the same purpose of reporting your unemployment income.
  • You must report the income shown on your form when you file your federal tax return, even if you did not have taxes withheld.
  • If you elected to have taxes withheld from your benefits, that amount appears on the form and reduces what you owe at tax time.
  • Request a replacement form when ready if you do not receive it by early February or if it contains incorrect information.

Understanding the 1099-G form

The 1099-G is the most common form you will receive. It shows the total unemployment benefits paid to you in the previous calendar year, broken down by type of benefit. Box 1a reports regular unemployment insurance; other boxes may show pandemic unemployment information (PUA), pandemic emergency unemployment compensation (PEUC), or other federal programs depending on what you received.

Box 2 on the 1099-G shows any federal income tax that was withheld from your payments. When you filed your claim or received your first payment, you may have been asked whether you wanted taxes withheld. If you said yes, the state deducted that amount (usually 10 percent) from each check and reports the total in Box 2. If you did not elect withholding, Box 2 will be blank or zero.

You receive a copy of the 1099-G for your records, and the state also sends a copy to the Internal Revenue Service (IRS). This means the IRS already knows you received this income, so you must report it on your return. If you do not report it and the IRS matches their records to your return, you may face penalties or a bill for unpaid taxes.

When you receive a W-2G instead of a 1099-G

A small number of states use the W-2G form to report unemployment benefits instead of the 1099-G. The W-2G is more commonly used for gambling winnings, but some state unemployment offices have adopted it for benefits reporting. The information is similar — it shows what you were paid and any taxes withheld — but the form layout and boxes are different.

If your state sends a W-2G, you report the income the same way you would with a 1099-G: include the total in your income when you file your federal return. The state unemployment office will tell you which form to expect when you file your claim, or you can check your state's unemployment website to see which form it uses.

What to do if you had taxes withheld

If you elected to have federal income tax withheld from your benefits, that amount appears in Box 2 of your 1099-G. This withheld amount is credited toward your total federal tax liability for the year. When you file your return, you report the full amount of benefits received (the total in Box 1a and any other benefit boxes), and the withheld amount reduces what you owe or increases your refund.

For example, if you received $10,000 in benefits and had $1,000 withheld, you report $10,000 as income. The $1,000 withheld is treated like a payment toward your taxes, so if your total tax liability for the year is $800, you would receive a refund of $200. If your liability is $1,500, you would owe $500 more.

Many people who receive unemployment benefits do not have enough other income to owe federal tax, or they owe less than what was withheld. In those cases, withholding results in a refund when you file. However, if you did not have taxes withheld and you owe tax on the benefits, you will owe that amount when you file unless you have other income or credits that offset it.

What to do if you did not have taxes withheld

If you did not elect withholding when you filed your claim, no federal income tax was taken from your checks. Box 2 on your 1099-G will be blank or show zero. You still owe federal income tax on the full amount of benefits you received, and you must account for that when you file your return.

The amount you owe depends on your total income for the year, your filing status, and whether you have dependents or other credits. If unemployment was your only income and the total is below the threshold for your filing status, you may not owe federal tax. You can use the IRS tax withholding estimator on irs.gov to get a rough idea of whether you will owe.

If you realize you will owe tax and you do not have the money set aside, you have options when you file: you can request a payment plan with the IRS, or you can file your return and pay what you can. The IRS will work with you on timing, though interest and penalties will accrue on any unpaid balance.

Correcting errors on your tax form

If your 1099-G or W-2G contains an error — for example, the total amount is wrong, or your name or Social Security number is misspelled — contact your state unemployment office when ready. Do not wait until tax time. The state can issue a corrected form (usually called an amended 1099-G or W-2G) and send it to both you and the IRS.

If you discover the error after you have already filed your return, you will need to file an amended return (Form 1040-X) with the IRS to correct your reported income. This is more complicated and takes longer, so catching errors early is important. Keep the original form and any correspondence from the unemployment office showing the correction.

Common errors include the state reporting benefits you did not actually receive (for example, if your claim was denied but the form shows a payment), or reporting the wrong amount of withholding. If you were overpaid and had to repay benefits, that may also affect what the form shows — some states deduct repayments from the reported total, while others do not, so verify the amount matches what you actually kept.

If you do not receive your form by early February

Tax forms are mailed by January 31, but mail delays happen. If you do not receive your 1099-G or W-2G by early February, contact your state unemployment office. Most states have an online portal where you can request a replacement form, or you can call the office directly.

Have your Social Security number and claim number ready when you contact them. The state can usually email or mail a replacement form within a few business days. If you are close to the tax filing important date and still waiting, many state offices allow you to file your return with an estimate of the amount and then amend it once you receive the actual form.

Some states also post 1099-G information in your online unemployment account, so you can log in and view or read the form directly rather than waiting for the mailed copy. Check your state's unemployment website to see if this option is available.

State income tax and unemployment benefits

In addition to federal tax, you may owe state income tax on unemployment benefits. Most states tax unemployment income the same way the federal government does. Some states allow you to elect withholding of state income tax as well, similar to federal withholding.

A few states do not have income tax at all (such as Texas, Florida, and Wyoming), so residents of those states do not owe state tax on unemployment benefits. If you lived in one state when you filed your claim but moved to another state, or if you worked in one state and filed in another, the tax situation can be complicated. Your state unemployment office can tell you whether state withholding is available and how state tax applies to your benefits.

Frequently Asked Questions

Do I have to report unemployment benefits on my tax return if I did not receive a 1099-G?

Yes. You must report all unemployment benefits you received, whether or not you receive a form. If you did not receive a form by early February, contact your state unemployment office to request one. If the form never arrives, you can still file your return and report the amount based on your records — the state has a copy on file and can verify it if needed.

What if I received benefits from two different states in the same year?

You will receive a separate 1099-G or W-2G from each state. Report the income from each form on your tax return. The total of all benefits from all states is what you owe tax on. Make sure each form is accurate before you file, because the IRS will receive copies from both states.

Can I deduct any expenses related to my unemployment?

Generally, no. Unemployment benefits are reported as income, and there is no corresponding deduction for job-search expenses or other costs related to being unemployed. However, if you had work-related expenses in a year when you were partially employed, those may be deductible under other rules — consult a tax professional for your specific situation.

What happens if I owe back taxes and I receive unemployment benefits?

If you owe federal income tax from a previous year, the IRS can intercept your unemployment benefits to pay that debt. This is called a tax offset. If this happens, you will receive notice from both the IRS and the state unemployment office. You can appeal the offset or request a payment plan with the IRS, but the process takes time.

Do I need to keep my 1099-G or W-2G after I file my return?

Yes. Keep it for at least three years in case the IRS has questions about your return. If you file an amended return or if there is a discrepancy later, you will need the original form to show what was reported. Store it with your other tax documents.