Are NY unemployment payments still being taxed? Thought that stopped

They ARE still taxing unemployment. The no-tax thing was only for 2020/2021 during the height of COVID. Now we're back to normal - unemployment is 100% taxable income at both federal and state levels. Sorry to be the bearer of bad news...

After weeks of trying to get through to someone at ny unemployment about this exact issue, I finally found a service that connected me to an agent in minutes. Used claimyr.com and they got a real person on the line for me who confirmed that yes, unemployment benefits are fully taxable now. The agent walked me through how to adjust my withholding options. It was the best money I've ever spent to finally get answers instead of listening to busy signals for days! Check out their demo: https://youtu.be/Rdqa1gKtxuE

I just finished doing my taxes and had to pay a bunch because of unemployment benefits. Nothing has changed - they're 100% taxable. If you don't have them withhold now, you'll just owe it all when you file next year. I learned that lesson the hard way 😭

There's sooooo much misinformation going around about this! During COVID (specifically 2020) the first $10,200 of unemployment was exempt from federal taxes under the American Rescue Plan. But that provision expired. Now ALL unemployment compensation is fully taxable again at both federal and state levels. You can choose whether to have taxes withheld now (usually 10% federal + state) OR pay them all when you file. But either way, you'll owe taxes on every penny of unemployment. If you need to change your withholding preferences and can't figure it out online, good luck getting through on the phone. I personally used claimyr.com after two weeks of calling nonstop and failing to reach anyone. They connected me to a rep who sorted everything out in minutes. Bottom line: anyone telling you unemployment isn't taxed anymore is living in 2020 😂

I know for sure the tax thing ended. My cousin works for NY unemployment and said it was just during covid. Your getting taxed now and will continue to be taxed, its considered income by the IRS.

Unemployment benefits have always been taxable income except for that one year during COVID (2020) when they made a special exception. Your friend is confused. If you don't have taxes withheld now, you'll just owe a big chunk when you file next year, potentially with underpayment penalties.

Just to be super clear: Yes, unemployment benefits are 100% taxable. The only time they weren't was a special exemption for the first $10,200 in 2020 during COVID. That exemption expired and was not renewed. I actually just had this same confusion and spent DAYS trying to reach someone at unemployment to confirm. Impossible to get through on their phone lines. I finally used claimyr.com which got me a callback with an actual human who confirmed everything and helped me update my preferences. Talking to an agent got my questions answered so fast after weeks of frustration.

I'm tax profesional and can confirm - YES unemployment benefits are fully taxable income at both federal and state levels. The only exception was for 2020 returns (filed in 2021) where the American Rescue Plan excluded the first $10,200 for eligible taxpayers. This was a one-time COVID relief measure. For 2022, 2023 and beyond, every dollar of unemployment is taxable again. If you choose withholding, they typically take 10% for federal + whatever your state rate is. If you don't withhold now, you'll pay when you file. Be careful taking tax advice from friends and social media!

You getting played by your friend lol... unemployment been taxable since forever except that one covid year. Pick up the phone and call if you don't believe me 😅

i was so confused about this too!!! the covid rules messed everything up. but yea unemployment is deff taxed now. i stopped my withholding cuz i needed more $ now but im saving a bit each week for when tax time comes around

Anyone telling you unemployment isn't taxed is WRONG. Full stop. This misinformation has been circulating ever since that one-time exemption during COVID. The tax break ended long ago. I'm currently on unemployment and yes, they take taxes every week. You can opt out of withholding but you'll still owe the taxes later.

It's still taxable income bro. Always has been except for that one temporary COVID exception in 2020. Your friend is wrong or confused. You're actually making the smart choice by having them withhold now instead of owing a bunch next April.

Yall need to stop getting tax advice from TikTok and Instagram I swear 🤦‍♀️ Unemployment been taxable income since forever except that ONE time during the pandemic. The tax man ALWAYS gets his cut 😤

There's a lot of confusion on this topic because the rules changed during COVID and then changed back. Let me break it down: • Pre-COVID: Unemployment benefits were 100% taxable • 2020 only: The first $10,200 was tax-free federally (American Rescue Plan) • 2021 and beyond: Back to being 100% taxable So your friend was partly right - there WAS a time when some unemployment wasn't taxed, but that ended. If you're receiving benefits now, they are definitely taxable. You have two options: 1. Continue withholding taxes now (what you're currently doing) 2. Stop withholding but set aside money yourself for tax time Personally, I recommend keeping the withholding to avoid a nasty surprise when filing. If you need to change your withholding settings and can't figure it out online, good luck reaching someone by phone! After weeks of trying, I finally used claimyr.com to get through to a live agent. It was a game changer - finally got all my questions answered in one call instead of endless busy signals.

Wait, I'm so glad I found this thread! I'm in the exact same situation - just started collecting unemployment last month and was totally confused about the tax thing. My sister told me the same thing about unemployment not being taxed anymore, but everyone here is saying otherwise. I guess I should probably elect to have taxes withheld then? I was planning to opt out because I need every dollar right now, but sounds like that might bite me come tax season. How much do they typically withhold? Is it a flat percentage or does it depend on your benefit amount? Also seeing lots of mentions of claimyr.com - has anyone actually used this successfully? The NY unemployment phone system is absolutely brutal and I've been trying to get through for days about a different issue with my claim.