Tax Topic #418 |
2008 Tax Year |
Topic 418 - Unemployment Compensation
Unemployment compensation is includible in gross income. You must report
unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A,
or line 3 of Form 1040EZ.
Unemployment compensation generally includes any amounts received under
the unemployment compensation laws of the United States or of a state. It
includes state unemployment insurance benefits and benefits paid to you by
a state or the District of Columbia from the Federal Unemployment Trust Fund.
It also includes railroad unemployment compensation benefits, disability benefits
paid as a substitute for unemployment compensation, trade readjustment allowances
under the Trade Act of 1974, and unemployment assistance under the Disaster
Relief and Emergency Assistance Act of 1974. Unemployment compensation does
not include worker's compensation.
If you received unemployment compensation during the year, you should receive Form 1099-G (PDF) showing the amount you were paid. Any
unemployment compensation received during the year must be included in your
income, unless you contributed to the fund. See Below.
If you received unemployment compensation, you may be required to make
quarterly estimated tax payments. However, you can choose to have federal
income tax withheld. For more information, refer to Form W-4V (PDF), Voluntary Withholding Request.
Supplemental unemployment benefits received from a company financed fund
are not considered unemployment compensation for this purpose. These benefits
are taxable as wages, and are subject to income tax withholding. They may
be subject to social security and Medicare taxes as well. Supplemental unemployment
benefits are reported to you on Form W-2 (PDF). For
more information about supplemental unemployment benefits, see Publication 15-A (PDF) , section 5, page 12.
Unemployment benefits from a private fund (or, in some cases, public fund)
to which you voluntarily contribute are taxable only if the amounts you receive
are more than your total payments into the fund. This taxable amount is not
unemployment compensation; it is reported as other income on Form 1040 (PDF).
For more information, see Unemployment Benefits in Publication 525,
on page 27.
Page Last Reviewed or Updated: December 22, 2008
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