NYS Department of Labor unemployment compensation benefits received are taxable - need tax advice
Just realized that my unemployment compensation benefits received from NYS Department of Labor are going to be taxable when I file my 2024 taxes. I collected UI for about 8 months last year and received around $18,500 total. I didn't have any taxes withheld because I needed every penny to survive. Now I'm worried I'm going to owe a huge amount to the IRS. Has anyone dealt with this? Should I have been withholding taxes all along? I'm freaking out about how much I might owe.
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Mei Zhang
Yes, unemployment benefits are fully taxable as ordinary income. You should have received a 1099-G form from NYS Department of Labor showing the total amount you received. You can still request tax withholding on future claims if you're still collecting. For what you already received, you'll need to pay taxes on the full amount at your regular tax rate.
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Jamal Brown
•I did get the 1099-G but I guess I didn't understand what it meant. So there's no way to avoid paying taxes on the $18,500?
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Liam McConnell
same boat here, got like 15k in benefits and didnt withhold anything either... my tax guy said i probably owe around 3k depending on my other income
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Amara Oluwaseyi
For future reference, when you file your weekly claims through my.ny.gov, there's an option to have federal and state taxes withheld. I always recommend doing this because it prevents the shock at tax time. For your current situation, you might want to set up a payment plan with the IRS if you can't pay the full amount.
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CosmicCaptain
•Wait, you can have taxes withheld from unemployment? I've been collecting for 2 months and had no idea this was an option!
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Amara Oluwaseyi
•Yes, log into your my.ny.gov account and look for the tax withholding option when you do your weekly claim. You can choose to withhold 10% for federal taxes.
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Giovanni Rossi
THE GOVERNMENT TAKES MONEY FROM PEOPLE WHO ALREADY LOST THEIR JOBS AND THEN TAXES THEM ON IT!! This system is so messed up. They should at least warn people better about the tax implications when you first apply for benefits.
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Fatima Al-Maktoum
•I mean it does say it on the application forms but nobody reads all that fine print when they're desperate for money
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Mei Zhang
If you're having trouble reaching NYS Department of Labor to set up tax withholding for future claims, I had success using Claimyr (claimyr.com) to get through to an actual agent. They have this video demo that shows how it works: https://youtu.be/qyftW-mnTNI. Saved me hours of calling and getting busy signals.
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Jamal Brown
•Thanks, I'll check that out. I've been trying to call NYS Department of Labor for days to ask about my tax situation and can never get through.
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Dylan Mitchell
My brother went through this last year. He owed about $2,800 on $16,000 in unemployment. He was able to set up a payment plan with the IRS for like $150 a month. It's not ideal but at least it's manageable.
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