How does unemployment affect tax return filing in NY?
I received unemployment benefits from NYS Department of Labor for about 6 months last year and I'm wondering how this will impact my tax return. Do I need to report the UI payments as income? I got some forms from NYS but I'm not sure what to do with them. Also worried about owing money since I didn't have taxes taken out initially. Anyone dealt with this before?
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Liam O'Donnell
Yes, unemployment benefits are taxable income that must be reported on your federal and state tax returns. You should have received a 1099-G form from NYS Department of Labor showing the total amount you received. If you didn't have taxes withheld, you might owe taxes on those benefits depending on your total income for the year.
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Mei Liu
•I did get the 1099-G but wasn't sure if I had to include it. So even though it's unemployment insurance, it still counts as regular income for tax purposes?
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Amara Nwosu
Unfortunately yes, UI benefits are fully taxable. I learned this the hard way when I filed my taxes after my claim ended. The good news is you can elect to have taxes withheld from future unemployment payments if you file again. Just make sure to enter that 1099-G amount on your tax return or you could get audited.
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AstroExplorer
•Same thing happened to me! Ended up owing like $800 because I didn't know unemployment was taxable. Now I always have them take out 10% for taxes.
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Giovanni Moretti
this is so frustrating!! why dont they tell you upfront that youll owe taxes on unemployment money? seems like they should automatically take taxes out instead of making it optional
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Liam O'Donnell
•I agree it's confusing. NYS Department of Labor does give you the option to have federal taxes withheld when you file your initial claim, but many people miss it or don't understand the implications until tax time.
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Fatima Al-Farsi
If you're having trouble getting through to NYS Department of Labor to ask about your 1099-G or tax withholding questions, I used a service called Claimyr that helped me reach an actual agent. Check out claimyr.com - they have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Was way easier than trying to call the regular number and getting hung up on.
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Mei Liu
•Thanks for the suggestion! I might need to call them anyway since I think my 1099-G amount looks wrong compared to what I remember receiving.
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Dylan Cooper
just a heads up - if you received unemployment in 2024 make sure youre using the right tax forms. the rules changed a bit from covid years. also check if you qualify for any credits that might offset what you owe
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Landon Flounder
One thing that might help is to look into making quarterly estimated tax payments if you think you might need unemployment benefits again in the future. Since UI benefits don't have automatic withholding like regular paychecks, you can avoid a big tax bill by setting aside money throughout the year. I also recommend keeping detailed records of all your unemployment payments in case there are any discrepancies with the 1099-G form you receive.
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