This article serves as an informative guide for understanding taxation on unemployment benefits. If you collected unemployment benefits in 2023, keep in mind that your income from these benefits is taxable. The IRS and most states that impose an income tax view your unemployment income in the same light as regular income. However, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are perfectly tax-free or only impose taxes on investment-related income. Also, California, New Jersey, Pennsylvania, and Virginia do not charge an income tax on unemployment benefits. To find out how your state taxes unemployment benefits, reach out to your local tax agency.

Unemployment aid is given out by your state, but some are federally funded. In addition, there are specific industry benefits, including those for the railroad industry and for airline workers due to the Airline Deregulation Act of 1978.

It is crucial to remember that all of your unemployment assistance must be added to your gross income. If you are not sure whether to include a certain payment, refer to the interactive tool on the IRS website. Form 1099-G will be provided to you by the end of January, displaying the gross amount of unemployment income you have earned and what portion, if any, has been held for taxes.

If you are unable to meet your tax obligations due to financial limitations, it remains essential to file your return. Getting behind on tax payments incurs interest and possible penalties. If you are unable to pay off your full taxes due to financial difficulties, you’ll have the option to pay your balance in installments, making monthly payments.

One of the common issues unemployment recipients face is how to get a hold of EDD, especially when there are questions about the tax implications. Thankfully, numerous resources are helpful in this regard, such as visiting eddcaller.com. This site provides information and strategies on how to effectively reach out and connect with the EDD California customer service, ultimately helping to expedite needed responses.