Form 1099-G and unemployment taxes.

Unemployment benefits are income

Pub. 525 says that generally you must include in income all unemployment compensation you receive. It covers state unemployment insurance benefits, benefits paid by a state or D.C. from the Federal Unemployment Trust Fund, railroad unemployment compensation, certain disability payments from a government program paid as a substitute for unemployment compensation, trade readjustment allowances and unemployment assistance under certain disaster and airline laws. Workers’ compensation for injury or illness is not unemployment compensation.

The boxes that matter

Box 1: unemployment compensation

The payer enters payments of $10 or more of unemployment compensation, the total before any income tax was withheld. IRS Tax Topic 418 says to report the box 1 amount on line 7 of Schedule 1 (Form 1040) and attach it to the Form 1040. If you received unemployment compensation but no form arrived by mail, Pub. 525 says you may need to access your information through your state’s website to get your electronic Form 1099-G.

Box 4: federal income tax withheld

Box 4 holds federal tax withheld at your request. Pub. 525 says you can choose withholding by giving Form W-4V to the paying office, and that tax will be withheld at 10% of your payment. Tax Topic 418 says to include the box 4 amount as withholding on line 25b of Form 1040. If you do not choose withholding, Pub. 525 warns you may be liable for estimated tax and could owe a penalty if you do not pay enough through withholding or estimated payments. The 1099-G instructions note that state withholding is not required to be reported to the IRS.

Box 2: state or local income tax refund

Box 2 is a different item: state or local income tax refunds, credits or offsets of $10 or more. It is not unemployment compensation. A refund is taxable only if the earlier deduction reduced your federal tax, so it matters mainly if you itemized.

Boxes 5 to 10

Box 5 is RTAA (reemployment trade adjustment assistance) payments, which are included in income but cannot have voluntary withholding. Box 6 is taxable grants, box 7 agriculture payments and box 10 is governmental paid family leave benefits, a box added so that family leave payments are reported on this form.

Repayments

Pub. 525 says that if you repaid in the same year unemployment compensation you got that year, subtract the repayment from the total received and report the difference on Schedule 1 line 7, writing “Repaid” and the amount on the dotted line next to your entry. If you repaid in a later year benefits that you reported in an earlier year, and the amount is more than $3,000, you can deduct it on Schedule A, if you itemize, or take a credit on Schedule 3; smaller amounts are handled under the Pub. 525 repayment rules.

If the form is wrong

Criminals file unemployment claims in other people’s names, and state agencies send the 1099-G to the person whose name and Social Security number were used. Tax Topic 418 says victims who receive a 1099-G with inaccurate amounts in box 1 should notify the state agency and request a corrected form. The IRS also links to its identity theft and unemployment benefits page and to the Department of Labor’s fraud reporting pages.

Worked example

Box 1 shows $9,600 and box 4 shows $960. That is exactly 10% of box 1, the rate the IRS says applies when you choose withholding. You report $9,600 on Schedule 1 line 7 and $960 as withholding on line 25b. If you repaid $600 that same year, box 1 still shows the gross, and you report $9,000, writing “Repaid $600” beside the entry.

Sources

• Instructions for Form 1099-G (12/2026) — boxes 1, 2, 4, 5, 6 and 10
• Publication 525 (2025) — unemployment compensation, 10% withholding, repayment, state website access
• IRS Tax Topic 418 — Schedule 1 line 7, line 25b, fraud-victim forms
• Publication 1099 (2026) — $10 filing level and January 31 recipient date

Figures and rules above were retrieved November 2026 from the IRS pages listed. Agencies revise forms and instructions, so confirm anything that affects your return against the current IRS page. This page does not list each state’s unemployment website; sign in to your own state agency account to get the form.

Frequently asked questions

Is unemployment taxable?

Yes. Pub. 525 says generally you must include in income all unemployment compensation you receive. Box 1 of Form 1099-G shows the amount, and you report it on line 7 of Schedule 1.

How much federal tax is withheld from unemployment?

Only if you chose it. Pub. 525 says to give Form W-4V to the paying office and that tax will be withheld at 10% of your payment.

I never got a 1099-G. Where is it?

Pub. 525 says if you did not get Form 1099-G in the mail you may need to access your electronic form through your state’s unemployment website.

What if I got a 1099-G for benefits I never received?

IRS Tax Topic 418 says victims of unemployment fraud who receive a 1099-G with inaccurate amounts in box 1 should notify the state agency and request a corrected form.

What if I repaid unemployment in the same year?

Subtract the repayment from what you received and report the difference on Schedule 1 line 7, writing Repaid and the amount on the dotted line beside your entry.