Question: Are unemployment benefits subject to federal income tax?
Answer: Yes, unemployment benefits are subject to federal income tax. The government unit that paid you should provide you with a year-end statement (Form 1099-G) showing the amount that is to be included as income on your tax return.
To avoid having a large tax balance due at filing time, you should consider filling out Form W4-V to have the proper amount of income tax withheld from each unemployment check.
