Can you get unemployment if you owe back taxes - NYS Department of Labor eligibility question
I've been out of work for two weeks and need to file for unemployment benefits through NYS Department of Labor. The problem is I owe about $8,000 in back taxes to the IRS from 2022 and 2023. My friend told me that having tax debt might disqualify me from getting UI benefits but I can't find anything clear on the my.ny.gov website. Has anyone been in this situation? Will NYS Department of Labor reject my claim because of unpaid federal taxes? I really need these benefits to pay rent while I look for work.
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Michael Green
Tax debt to the IRS doesn't automatically disqualify you from receiving unemployment benefits in New York. NYS Department of Labor determines eligibility based on your work history, reason for separation, and ability to work - not your tax status. However, there could be complications with payment processing if you have active tax liens or wage garnishments.
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Hannah White
•That's a relief! I don't have any liens yet, just the debt. Should I mention the tax situation when I file my claim or just answer the standard questions?
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Mateo Silva
i had this exact problem last year - owed like 6k to irs and still got my unemployment no problem. nys department of labor never even asked about taxes. BUT when i got my 1099-G form at tax time it made things complicated with my accountant
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Victoria Jones
•Good point about the 1099-G! The unemployment benefits will be reported as income which could affect your tax liability for this year. You might want to have taxes withheld from your weekly benefits to avoid owing even more next year.
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Cameron Black
Wait, I'm confused - if you owe back taxes doesn't that mean the government can take your unemployment money? I thought any government payments could be intercepted for tax debt??
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Michael Green
•You're thinking of federal tax refund intercepts, which is different. NYS Department of Labor unemployment benefits generally aren't subject to federal offset for tax debt, but state tax debt could potentially be an issue. The Treasury Offset Program typically applies to federal benefits like Social Security, not state unemployment.
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Jessica Nguyen
I've been trying to reach someone at NYS Department of Labor for weeks about a different issue but their phone lines are impossible. If you need to speak with an agent about this tax situation, I recently discovered Claimyr (claimyr.com) which actually got me through to a real person. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Might be worth checking out if you need clarification directly from NYS Department of Labor.
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Hannah White
•Thanks for the suggestion! I might try that if I run into problems during the application process.
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Isaiah Thompson
honestly the whole system is a mess... i know people who got unemployment while owing child support, back rent, credit card debt - they don't really check that stuff when you apply. just make sure you qualify based on work history and weren't fired for misconduct
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Oliver Weber
Just to add some clarity - I work in tax resolution and can confirm that federal tax debt won't prevent you from getting NYS unemployment benefits. The application process focuses on employment eligibility, not tax status. However, I'd recommend setting aside a portion of your weekly benefits for taxes since unemployment is taxable income. You can request voluntary withholding when you certify each week to avoid a bigger tax bill next year, especially given your existing debt situation.
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QuantumQuasar
•This is really helpful advice from a professional perspective! I was worried about the tax implications but didn't know I could request withholding upfront. That makes total sense given I already owe money. Quick question - do you know roughly what percentage I should have withheld? I don't want to make my current financial situation worse but also can't afford to dig the hole deeper next tax season.
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