Question

I have a question about tax on unemployment income — Will unemployment benefits tax have ramifications on my refund?

Answer

Regarding unemployment benefits tax, unemployment benefits are taxable income. If your income goes up because you receive unemployment, your tax liability, due to tax on unemployment income, can go up, too. This means your refund will be lower or you’ll owe more taxes — Unless you covered the increase for tax on unemployment income by either:

  • Withholding from your unemployment benefits
  • Paying estimated taxes

Related Topics

Related Resources

Exempt Interest Dividends

Learn more about tax exempt dividends and get tax answers at H&R Block.

Reporting Disability Insurance Payments On Taxes

Should you report disability insurance payments as income on your taxes? Learn more from the tax experts at H&R Block.

CARES Act waives 2020 Required Minimum Distribution (RMD) for retirement investors

Not sure if you have to take your required minimum distribution (RMD) in 2020? H&R Block’s experts explain how the CARES Act lets you suspend your 2020 RMD.

What Is Adjusted Gross Income?

Adjusted Gross Income is simply your total gross income minus specific deductions. Additionally, your Adjusted Gross Income is the starting point for calculating your taxes and determining your eligibility for certain tax credits and deductions that you can use to help you lower your overall tax bill.