TAXSMITH, LLC – Unemployment Benefits and Filing Your Federal Tax Return

TAXSMITH, LLC – Unemployment Benefits and Filing Your Federal Tax Return
April 17, 2013
TAXSMITH, LLC – What Medical and Dental Benefits Can I Claim On My Federal Tax Return?
April 17, 2013

TAXSMITH, LLC – Unemployment Benefits and Filing Your Federal Tax Return

If you received unemployment benefits this year, you MUST report the payments on your federal income tax return.

Here are four tips from Taxsmith attorneys and the IRS about unemployment benefits…

1. You must include all unemployment compensation you received in your total income for the year. You should receive a Form 1099-G, Certain Government Payments. It will show the amount you were paid and the amount of any federal income taxes withheld from your payments.

2. Types of unemployment benefits include:

  • Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
  • Railroad unemployment compensation benefits
  • Disability payments from a government program paid as a substitute for unemployment compensation
  • Trade readjustment allowances under the Trade Act of 1974
  • Unemployment assistance under the Disaster Relief and Emergency Assistance Act

3. You must include benefits from regular union dues paid to you as an unemployed member of a union in your income. However, other rules apply if you contribute to a special union fund and your contributions are not deductible. If this applies to you, only include in income the amount you received from the fund that is more than your contributions.

4. You can choose to have federal income tax withheld from your unemployment benefits. You make this choice using Form W-4V, Voluntary Withholding Request. If you complete the form and give it to the paying office, they will withhold tax at 10 percent of your payments. If you choose not to have tax withheld, you may have to make estimated tax payments throughout the year.

The tax lawyers at Taxsmith, LLC at here to answer any and all questions that you may have whether or not it applies to home office deductions or something else. We will help you resolve IRS tax debt problems through the expertise of our income tax lawyers. Please contact us directly at 888.741.0272 or at We look forward to battling the IRS with you as your Tax Burden Rescue Team!