Do you have to pay back unemployment on taxes - NYS Department of Labor question
I'm really confused about my unemployment taxes. I got UI benefits from NYS Department of Labor for about 8 months last year after getting laid off from my retail job. Now I'm doing my 2024 taxes and my accountant is telling me I might owe money back? I thought unemployment was supposed to help you, not create more problems. I had taxes taken out of my weekly payments but apparently it wasn't enough. Has anyone else dealt with this? I'm stressed because I already spent all that money on rent and groceries.
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AaliyahAli
You don't have to 'pay back' unemployment benefits, but unemployment income is taxable by the IRS and New York State. When you filed your weekly claims with NYS Department of Labor, you had the option to have 10% federal taxes withheld and state taxes withheld. If you chose not to withhold taxes or the withholding wasn't enough to cover what you owe, you'll need to pay the difference when filing your tax return. This is normal - it's not paying back the benefits themselves, just paying the taxes on that income.
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Theodore Nelson
•OK that makes more sense. I think I did choose to have taxes taken out but maybe it wasn't enough. My accountant said I owe like $800 more in taxes than what was withheld.
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Ellie Simpson
same thing happened to me!! i was so mad when i found out unemployment counts as income for taxes. nobody tells you this when you apply through NYS Department of Labor
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AaliyahAli
•Actually, when you certify for weekly claims on the NYS Department of Labor website, there's information about tax withholding options. But I agree it's not explained very clearly and many people miss it.
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Arjun Kurti
This exact situation is why I always recommend having taxes withheld from unemployment payments. I learned this the hard way years ago when I got hit with a huge tax bill after collecting UI. Now whenever someone asks me about filing for unemployment benefits, I tell them to definitely elect tax withholding even though it means smaller weekly payments. The alternative is owing potentially thousands at tax time.
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Theodore Nelson
•I wish someone had told me this when I first applied! I probably would have chosen the withholding if I understood it better.
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Raúl Mora
If you're having trouble reaching NYS Department of Labor about tax questions or need to get your 1099-G form, I found this service called Claimyr that helped me get through to an agent quickly. You can check it out at claimyr.com - they have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. I was on hold for hours trying to reach someone about my tax documents and this got me connected in like 15 minutes.
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Theodore Nelson
•Thanks, I might need that. I still haven't gotten my 1099-G form in the mail and my accountant needs it to finish my taxes.
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Margot Quinn
Just to clarify for anyone reading this - you should have received a 1099-G form from NYS Department of Labor showing the total unemployment compensation you received in 2024. This form is what you use to report the income on your tax return. If you had taxes withheld, that will also be shown on the 1099-G. The form should be available online through your my.ny.gov account if you didn't receive it by mail.
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Evelyn Kim
ugh i hate tax season. between unemployment and my part time job income everything is so complicated now
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