NY unemployment taxes - will I have to pay back my stimulus money on taxes?

Your tax preparer is mistaken. The $1400 economic impact payment (stimulus) is NOT taxable income and does NOT need to be paid back. It's completely separate from your unemployment benefits. It's basically an advance tax credit that doesn't count as income. The only thing you should have received is a letter confirming you got the payment for your records. Your NY unemployment benefits ARE taxable though - maybe that's what caused the confusion?

no you dont pay back stimulus its a gift from govt but unemployment benefits ARE taxed so you will owe on those unless you had taxes withheld already

Let me clarify this because there's a lot of confusion around NY unemployment and stimulus payments: 1. Economic Impact Payments (stimulus checks) are NOT taxable and do NOT need to be paid back 2. You DO need to report receiving it on your tax return using the letter they sent (Notice 1444 or similar) 3. NY unemployment benefits ARE fully taxable at both federal and state levels 4. If you didn't have taxes withheld from your unemployment (the default is NOT to withhold), you may owe taxes on those benefits Sounds like your tax preparer confused these two different things. I would consider getting a second opinion if they're making basic errors like this.

i had same issue!!! preparer told me stimulus was gonna be deducted from my refund but when i got a 2nd opinion turned out he was dead wrong. stimulus is NOT taxable and NOT paid back. but my unemployment benefits did get taxed so maybe thats what they meant?

The most common mistake I see in my practice is confusion between the stimulus payments and unemployment benefits. Your tax preparer is incorrect - the $1400 stimulus is NOT taxable and NEVER needs to be repaid under any circumstance. It's essentially a tax credit given in advance. However, NY unemployment benefits ARE fully taxable on both federal and state returns. If you didn't select to have taxes withheld when claiming your benefits (which most people don't), you'll owe taxes on that money when you file. You'll need to report the stimulus payment on your return using the letter the government sent, but only to reconcile your records - not to pay tax on it.

I got SO frustrated trying to reach someone at the NY unemployment office to clarify this exact question! Spent 3 days trying to get through their phone system with no luck. Finally used Claimyr (claimyr.com) to get a callback from an agent in under an hour. They confirmed the stimulus payment isn't taxable or connected to unemployment at all. Check out their demo at https://youtu.be/Rdqa1gKtxuE if you need to speak to someone directly. Way better than waiting on hold forever.

One more thing to add - make sure your tax preparer includes the Recovery Rebate Credit worksheet with your return. This formally reconciles your stimulus payment and confirms you don't owe anything on it. If they're confused about something this basic, I would seriously consider finding a different tax professional who understands how unemployment and stimulus payments work.

my sister works for NY unemployment and she says they get this question all the time!! the stimulus was from federal govt not from unemployment and its not taxed. but your unemployment benefits are 100% taxable so make sure you budget for that next time maybe?

Update: I went back to my tax preparer with all this info and they admitted they made a mistake! They're redoing my taxes for free. Turns out I DO owe taxes on my unemployment income (about $870) but nothing on the stimulus. Thanks everyone for saving me from paying money I didn't need to!