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IRS Tax Tip 2013-26: Four Tax Tips about Your Unemployment Benefits
Four Tax Tips about Your Unemployment Benefits
If you received unemployment benefits this year, you must report the payments on your federal income tax return.
Here are four tips from the IRS about unemployment benefits.
1. You must include all unemployment compensation you received in your total income for the year. You should receive a Form 1099-G, Certain Government Payments. It will show the amount you were paid and the amount of any federal income taxes withheld from your payments.
2. Types of unemployment benefits include:
Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
Railroad unemployment compensation benefits
Disability payments from a government program paid as a substitute for unemployment compensation
Trade readjustment allowances under the Trade Act of 1974
Unemployment assistance under the Disaster Relief and Emergency Assistance Act
3. You must include benefits from regular union dues paid to you as an unemployed member of a union in your income. However, other rules apply if you contribute to a special union fund and your contributions are not deductible. If this applies to you, only include in income the amount you received from the fund that is more than your contributions.
4. You can choose to have federal income tax withheld from your unemployment benefits. You make this choice using Form W-4V, Voluntary Withholding Request. If you complete the form and give it to the paying office, they will withhold tax at 10 percent of your payments. If you choose not to have tax withheld, you may have to make estimated tax payments throughout the year.
For more information on unemployment benefits see IRS Publications 17, Your Federal Income Tax, or IRS Publication 525, Taxable and Nontaxable Income. You can download these free booklets and Form W-4V from the IRS.gov website. You may also order them by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:
Publications 17, Your Federal Income Tax
Publication 525, Taxable and Nontaxable Income
Form W-4V, Voluntary Withholding Request
IR-2013-25: IRS Now Accepting All 2012 Returns
IRS Now Accepting All 2012 Returns
IRS YouTube Video
Do It Yourself Free Tax Preparation: English | ASL
WASHINGTON — The Internal Revenue Service announced today that it has finished updating its tax-processing systems allowing all remaining individual and business taxpayers to file their 2012 federal income tax returns.
Over the weekend, the IRS completed reprogramming and testing of its systems for tax-year 2012 including all remaining updates required by the American Taxpayer Relief Act (ATRA) enacted by Congress in January. This final step clears the way for those claiming residential energy credits on Form 5695 and various business tax credits and deductions to file their returns.
The IRS began accepting 2012 returns in phases as it worked quickly to update various forms and instructions and made critical adjustments to its processing systems to reflect the current law. As a result, the agency began accepting most returns filed by individual taxpayers on Jan. 30. Additional returns could be accepted in February. All remaining returns, affecting in relative terms the smallest group of taxpayers, can now be filed.
With just six weeks to go before this year’s April 15 deadline, the IRS reminds taxpayers that the best way to file an accurate return is to e-file, choose direct deposit if expecting a refund and take advantage of the wide variety of tax-filing and tax-help resources available on IRS.gov. People who need more time to finish their returns can easily get an automatic six-month tax-filing extension by going to the Free File link or filing Form 4868.
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