How to File Unemployment Compensation Tax
- 1). Gather together Form 1099-G, Form 1040 with instructions and your records on the unemployment amounts you received. You should receive a Form 1099-G in the mail from the government agency that paid you the unemployment benefits. Form 1040 and the instructions can be downloaded from the IRS website (see Resources).
- 2). Determine your taxable unemployment compensation. For each Form 1099-G, write down the amount in box 1 on Form 1099-G. Subtract any amount you contributed to a governmental unemployment compensation program, if you do not itemize deductions. Subtract repayments made during the tax year for unemployment compensation overpayments. This is your taxable unemployment compensation. If you have more than one Form 1099-G, total the taxable amounts.
Taxable unemployment compensation includes both federal and state unemployment benefits. You must also include railroad unemployment compensation benefits, disability benefits paid for unemployment compensation, trade readjustment allowances under the Trade Act of 1974, and unemployment assistance paid under the Disaster Relief and Emergency Assistance Act of 1974. Box 1 on the 1099-G reports the benefits paid by each agency. - 3). Check the amount reported on your 1099-G against your unemployment payment records.
- 4). Enter the total taxable unemployment compensation on line 19 of Form 1040. Prior to 2010, the IRS allowed the first $2,400 of unemployment benefits to be excluded. However, this exclusion was eliminated in 2010 and can no longer be claimed.
- 5). Complete the remaining information on your Form 1040 and file your return with the IRS. Include Form 1040-V (Payment Voucher) and enclose any payment due. Alternately, you can e-file your return and electronic copies of these forms will be created.
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