IRS: Is my unemployment taxable income?

The pandemic has caused a lot of Americans to collect unemployment over the last two years, but can the IRS tax that?

IRS tax forms spread out, printed in pink and blue ink to submit for a tax refund

The answer for this year is yes.

Last year the American Rescue Plan passed a measure that would exempt the first $10,200 in unemployment wages someone earned from being taxed.

This only applied to benefits from 2020.

Now that Americans are claiming taxes in 2022 for 2021, that rule no longer applies.


Tools available to help this tax season

How to report your unemployment amount to the IRS

You must legally file any unemployment benefits you make as income to the IRS for it to be taxed.

If you received unemployment your state will send you a 1099-G which you will use to report your wages.

You can use this tool from the IRS that answers whether your payments you receive for unemployment are taxable.


Where is my 2021 tax refund from the IRS?

Many Americans had already filed their taxes and paid on the unemployment benefits they received in 2020 before the new law was passed.

This made it so the IRS needed to issue refunds specifically for unemployment wages.

On Jan. 12, the IRS shared that they have issued over 11.8 million refunds, but they are still working on the more complex tax returns.

Once your return is finalized you will get a letter from the IRS notifying you of the changes they made.