Unemployment Benefits and Taxes
|Unemployment benefits are considered income, and taxed at a rate of 10% for federal taxes and 5.05% for state taxes. You can choose to have you taxes withheld now, or pay them when you file your taxes. Here's what the difference looks like:|
|Not Withholding Tax||Withholding Tax|
|If you choose not to have your taxes withheld, nothing will be deducted from your weekly payments, but you will be responsible for paying federal and state taxes — 15% of the total amount of unemployment payments you received — in one lump sum when filing your taxes.||If you choose to have your taxes withheld, the amount you owe for tax — 15% of your benefit — will be deducted automatically from your weekly payments, and you will not need to pay any additional money on your benefits when you file your taxes|
For more information, including Spanish translation, visit CONNECT.