Your unemployment insurance is taxable, although states often exempt it from state income taxes. The unemployment insurance funds of your state will report your total unemployment insurance for the year on the Form 1099-G. You will report your benefits on the tax return sin Form 1040A, 1040EZ or 1040. Any unemployment benefits you get which include benefits paid under any regular state program, trade readjustment allowance benefits, and extended benefit program and disaster unemployment assistance should be reported as part of the gross income you receive on your state and federal income tax returns.

Depending on the status of your tax, you could be responsible for making estimated quarterly tax payments directly to the IRS for the tax you owe. In general, you should make estimated tax payments if you are expecting to owe after deducting credits and withholding at least $1000 in tax t the IRS. You can use Federal Form 1040-ES for Individuals.

If you like, you can have your taxes withheld from your unemployment insurance as you receive them.  You cold request to have the federal/state taxes withheld from your weekly check and forwarded automatically to the IRS and DOR. The federal tax withheld would be about ten percent of your weekly unemployment benefit payment rate. The tax withheld would be 5.3 percent. The next January, the DUA will mail you a statement 1099-G showing the total benefits paid and taxes withheld for filing purposes.

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