ROCHESTER, N.Y. (WROC) — Unemployment income is taxable and needs to be included on your 2020 tax return if you received the benefit last year.
CPA Matt Bryant explained what you need to know Thursday during News 8 at Sunrise.
Is unemployment income taxable?
· Yes, unemployment income is taxable by both the IRS and New York State
How does New York State report unemployment income?
· New York State should have mailed Form 1099-G by the end of January
What if you haven’t received your Form 1099-G yet?
· You can download your Form 1099-G at labor.ny.gov/signin
How is unemployment income reported on your income tax return?
· Unemployment income is included with your W-2 in taxable income
· Any amounts withheld for federal or New York State income taxes will reduce your tax liability
What happens if you file your return without including your unemployment income?
· The New York State Department of Labor will notify the IRS and the New York State Department of Taxation and Finance of your unemployment income, so they will be looking for it when you file your return
· The IRS and/or New York State may adjust your income tax return to add in the unemployment income and give you credit for income taxes withheld
How can one prepare their income tax return including their unemployment income?
· The New York State Department of Taxation and Finance web site has information on Free File software for taxpayers that made less than $72,000
· Information is also available on approved software available for those that make more
What if a taxpayer has questions about unemployment income and their income tax returns?
· A trusted certified public accountant can be a great resource for income tax questions and returns