NY unemployment tax question - Do I need to claim first $10k on my 1099 for 2025 taxes?
I'm confused about how to handle my unemployment taxes this year. Last year I claimed all my unemployment benefits on my taxes, but then got some kind of refund for a portion of it. For this year (2025), do I still have to claim the first $10,000 from my 1099-G on my tax return? I heard something about a tax break but I'm not sure if that was just a one-time thing or if it's still happening. Anyone know the current rules for NY unemployment and taxes?
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Aileen Rodriguez
The tax exclusion for unemployment benefits was a temporary measure during COVID. For your 2025 taxes, you'll need to report ALL unemployment compensation as income. The 1099-G you receive from NY DOL will show the total amount you need to report on your federal and state tax returns. There's currently no $10K exemption for 2025.
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Bruno Simmons
•Ugh that's what I was afraid of. So I have to pay taxes on the full amount? That's going to hurt my refund this year...
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Zane Gray
i think ur talking about that covid thing where they didnt tax like the first 10 grand of unemployment. that ended years ago bro
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Maggie Martinez
•This is correct. The American Rescue Plan Act of 2021 included a one-time exclusion that allowed taxpayers to exclude up to $10,200 of unemployment compensation from their 2020 taxable income (if their modified AGI was less than $150,000). This provision was not extended to subsequent tax years.
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Alejandro Castro
Same boat here! I was counting on that $10k exclusion and just found out it's gone. Already spent my "expected" refund on car repairs 🤦♀️
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Bruno Simmons
•That's exactly my problem too! I was planning my budget assuming I wouldn't have to pay taxes on part of it. This is going to mess up my finances.
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Monique Byrd
You absolutely need to report all unemployment benefits as income for 2025. However, there are a few strategies that can help reduce your overall tax burden: 1. Make sure you're claiming all eligible deductions and credits 2. If you're still on unemployment, consider having taxes withheld from future payments (Form W-4V) 3. Look into the Earned Income Tax Credit if your income is lower this year 4. Check if you qualify for free tax preparation services through VITA or TCE programs If you're having trouble understanding your 1099-G or need to get a replacement, you'll need to contact NYSDOL directly. Unfortunately, their phone lines are constantly jammed.
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Jackie Martinez
•After spending DAYS trying to get through to NYSDOL about my incorrect 1099-G, I finally used this service called Claimyr (claimyr.com) that got me connected to an agent in about 20 minutes. They have a video showing how it works at https://youtu.be/Rdqa1gKtxuE - definitely worth it when you need tax documents corrected before the filing deadline!
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Lia Quinn
I JUST got off the phone with my tax guy about this EXACT question! He confirmed the COVID $10K exemption is DEFINITELY gone for 2025 taxes. You have to report 100% of what's on your 1099-G as income. It SUCKS but that's how it is now. My tax bill went up by almost $1,500 because of this!!!!
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Bruno Simmons
•$1,500?! That's a lot more than I was expecting to pay. I guess I need to adjust my budget for the next few months...
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Haley Stokes
Actually this reminds me I had a similar issue back when I was on unemployment in 2023. I ended up owing way more than I expected because I thought some portion was still tax-free. The state sent me a notice about underpayment penalties and everything. Make sure you report the full amount or you might end up with penalties too.
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Maggie Martinez
•This is an important point. Underpayment penalties can add up quickly. If you're concerned about owing more than expected, you may want to consider making an estimated tax payment before the filing deadline to minimize potential penalties.
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Zane Gray
just make sure u got the right 1099g form. my friend got 2 different ones and the 2nd one was the right one. ny unemployment messes up paperwork all the time
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Bruno Simmons
•That's a good point. I should double check I have the most recent form. I think I only received one, but maybe there's an updated version online.
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Monique Byrd
One more important note: if you're using tax software to file your return, make sure you enter your 1099-G information correctly. The software should guide you through this, but many people make errors when entering unemployment compensation. The full amount from Box 1 of your 1099-G needs to be reported on Schedule 1 of your federal tax return, which then transfers to your Form 1040.
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Alejandro Castro
•This! I messed this up last year and had to file an amended return which took FOREVER to process. The tax software I used had a separate section specifically for unemployment income.
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Bruno Simmons
Thank you everyone for the help! Sounds like I definitely need to report the full amount from my 1099-G. I'm going to check if I can still set up withholding for my remaining benefits to avoid a bigger surprise next year. Not the news I was hoping for, but at least now I know what to expect.
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Aileen Rodriguez
•That's smart planning. Form W-4V lets you request 10% withholding from your unemployment benefits. It won't help with what you've already received, but it will make next year's taxes more manageable. You can download the form from the IRS website and submit it to NYSDOL.
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