Federal income taxes on Unemployment Insurance benefits
Although the state of New Jersey does not tax Unemployment Insurance benefits, they are subject to federal income taxes. To help offset your future tax liability, you may voluntarily choose to have 10% of your weekly Unemployment Insurance benefits withheld and sent to the Internal Revenue Service (IRS).
You can opt to have federal income tax withheld when you first apply for benefits. You can also select or change your withholding status at any time by writing to the New Jersey Department of Labor and Workforce Development, Unemployment Insurance, PO Box 908, Trenton, NJ 08625-0908. Click here for the "Request for Change in Withholding Status" form.
What to know about income taxes and unemployment benefits
After each calendar year during which you get Unemployment Insurance benefits, we will provide you with a 1099-G form that shows the amount of benefits you received and taxes withheld. This information is also sent to the IRS.
Identity theft/fraud alert: If you receive a 1099-G but did not receive Unemployment Insurance compensation payments for the tax year on the notice, you may be the victim of identity theft. Please report your case of suspected fraud as soon as possible online or by calling our fraud hotline at 609-777-4304.
- If you were overpaid benefits, your 1099-G will still reflect, per federal law, the amount of funds paid to you, regardless of any funds you have returned. Please refer to the section titled “Repayments” in the IRS Publication 525 Taxable and Nontaxable Income for guidance on how to report overpayments/returned funds.
- Please note that your 1099-G reflects the total amount paid to you in 2022, regardless of the week that payment represents. Meaning, if you were paid in 2022 for weeks of unemployment benefits from 2021, those will appear on your 1099-G for 2022. Similarly, if you are paid for 2022 weeks in 2023, those will not be on your 1099-G for 2022 – they will appear on your 1099-G for 2023.
- If we have your email address on file, we will send you via email the information for your 1099-G for 2022.
- 1099-G information will also be available from the Check Claim Status tool no later than January 31. It will not be available in your unemployment dashboard.
Still have questions? Check out our FAQ here.