Unemployment:TaxSlayer Tax Tips| TaxSlayer.com
If you are unemployed and are receiving unemployment benefits, these payments can be of great benefit. These benefits are taxable, however, and must be reported on your federal tax return. You can elect to have federal and state withholding’s taken out on your benefits to ensure that you don’t get surprised at tax time. You should receive a form 1099-G showing the total taxable amount of unemployment income and you would enter that amount here.