NYS Department of Labor unemployment benefits - are they taxable income this year?
I've been getting unemployment benefits from NYS Department of Labor since I got laid off from my retail job in October. My neighbor told me that unemployment is taxable but I thought government benefits weren't supposed to be taxed? I'm really confused about this and tax season is coming up. Do I need to report my UI payments as income when I file my taxes? Will I owe money back or get a smaller refund because of this?
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Miguel Hernández
Yes, unemployment benefits are considered taxable income by both federal and New York state. NYS Department of Labor should have given you the option to have taxes withheld when you first filed your claim. If you didn't choose withholding, you'll need to report all your UI payments as income on your tax return and may owe taxes.
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KylieRose
•Oh no, I don't think I chose to have taxes taken out! Does that mean I'm going to owe a lot of money?
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Sasha Ivanov
same thing happened to me last year - got unemployment and didn't realize it was taxable until I got my 1099-G form. ended up owing like $800 in taxes because nothing was withheld
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Liam Murphy
You should receive a 1099-G form from NYS Department of Labor by January 31st showing the total amount of unemployment benefits you received in 2024. This is what you'll use to report the income on your tax return. If you want to avoid owing taxes next time, you can request 10% federal withholding when you file weekly claims.
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Amara Okafor
•The 1099-G should be available online through your my.ny.gov account too if you don't get the paper copy in time
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CaptainAwesome
THIS IS SO STUPID!!! Why doesn't NYS Department of Labor explain this better when you first apply? I had to find out the hard way too and got hit with a huge tax bill. The whole unemployment system is designed to screw people over even when they're already struggling
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Yuki Tanaka
I had issues getting through to NYS Department of Labor when I needed to change my withholding elections mid-year. Kept getting disconnected after being on hold forever. Finally used this service called Claimyr (claimyr.com) that actually got me connected to a real person. They have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Saved me so much frustration trying to get through their phone system.
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KylieRose
•Is that service free? I might need to call them about my tax withholding situation
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Yuki Tanaka
•It's not free but honestly worth it when you need to actually talk to someone at NYS Department of Labor instead of getting hung up on
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Esmeralda Gómez
Wait I'm confused - is unemployment taxable at the federal level or state level or both? And what about the extra money they give you for dependents?
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Miguel Hernández
Unemployment is taxable for both federal and New York state income taxes. The dependent allowance is also taxable income. The only exception was 2020 when the first $10,200 of unemployment was tax-free federally due to the pandemic, but that was a one-time thing.
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