Yes, you can get a tax refund even if you received unemployment — but only if you paid enough in taxes or had enough withheld
Unemployment benefits are taxable income. The IRS treats them the same way it treats wages: you owe federal income tax on the full amount you received. That means you may owe taxes on unemployment, or you may have overpaid and be due a refund. Whether you get money back depends on your total income for the year, what you had withheld, and whether you took the standard deduction or itemized.
The key is that unemployment itself does not disqualify you from a refund. You get a refund when the total tax you paid (through withholding or estimated payments) exceeds the total tax you actually owe. If you had taxes withheld from your unemployment checks, you may have already paid enough to cover your full tax bill — or to go over it.
Key Takeaways
- Unemployment benefits count as taxable income, and you owe federal tax on the full amount you received.
- If your state or the federal government withheld tax from your unemployment payments, that withholding counts toward your refund just like paycheck withholding does.
- You get a refund if your total withholding and payments exceed what you actually owe, regardless of whether the income came from work or unemployment.
- Report your unemployment on Form 1040, line 19b, and include the 1099-G your state sent you.
- If you did not have taxes withheld from unemployment, you may owe instead of getting a refund, unless other income or credits reduce what you owe.
How unemployment withholding affects your refund
When you received unemployment benefits, you had the option to have federal income tax withheld. Many people choose to do this to avoid a surprise tax bill at the end of the year. If you elected withholding, your state or the federal government took a percentage of each payment and set it aside for taxes.
That withheld amount works exactly like tax withheld from a paycheck. It reduces what you owe. If you had $5,000 in unemployment and $500 withheld, and your actual tax bill turns out to be $400, you get a $100 refund. The withholding is what creates the refund — not the unemployment itself.
If you did not elect withholding when you filed for unemployment, no tax was taken out. In that case, you may owe taxes on the unemployment income when you file your return, unless you had other income withheld (from a job, for example) that covers it, or unless tax credits reduce what you owe below zero.
Reporting unemployment on your tax return
Your state unemployment office sends you a Form 1099-G by January 31 each year. This form shows the total unemployment benefits you received and any federal tax that was withheld. You need this form to file your return accurately.
On your Form 1040, you report unemployment benefits on line 19b. Enter the total from box 1a of your 1099-G. If federal tax was withheld, that amount goes on line 33 (federal income tax withheld). The IRS matches your return against the 1099-G your state filed, so the numbers must match.
If you lost your 1099-G or have not received it, contact your state unemployment office directly. Do not guess at the amount. You can also check your unemployment account online — most states let you view and download your 1099-G through the same portal where you filed for benefits.
When you might owe instead of getting a refund
If you received unemployment but had no tax withheld, and your total income for the year was high enough to owe federal tax, you will owe on your return rather than getting a refund. This happens most often when someone worked part of the year and then collected unemployment for the rest.
Example: You earned $20,000 from a job (with $2,000 withheld) and received $8,000 in unemployment with no withholding. Your total income is $28,000. If your tax bill on $28,000 is $2,500, you owe $500 because you only had $2,000 withheld. You do not get a refund in this case.
You can avoid this by electing withholding when you file for unemployment, or by making estimated tax payments during the year if you know you will owe. Some people also choose to file a new Form W-4 with their employer (if they return to work) to have extra tax withheld from paychecks to cover the unemployment income.
Tax credits that can create a refund even without withholding
Even if you had no tax withheld from unemployment, you may still get a refund if you have tax credits that reduce your bill below zero. The most common is the Earned Income Tax Credit (EITC), which is a refundable credit — meaning you can get money back even if you owe no tax.
The EITC is based on earned income (wages from work), not unemployment. So if you worked part of the year and earned less than the EITC income limit, you may be due a credit. The credit can be larger than the tax you owe, creating a refund. Other refundable credits include the Child Tax Credit (if you have children) and the American Opportunity Credit (if you paid for education).
To know whether you may have access to for these credits, you need to file your return. The IRS calculates them based on your total income, filing status, and dependents. If you think you might may have access to, file even if you believe you owe taxes — the credits may wipe out what you owe and produce a refund instead.
Tracking your refund status after filing
Once you file your return, you can track your refund using the IRS Where's My Refund tool at irs.gov. You will need your Social Security number, filing status, and the exact refund amount from your return. The tool updates once per day, usually overnight.
If your return includes unemployment income, processing may take longer than a return with only wage income — the IRS cross-checks unemployment data with state records. Most refunds are issued within 21 days of filing if you file electronically and choose direct deposit. Paper returns take longer.
If you filed and your refund status shows "still processing" after 21 days, wait a few more days before contacting the IRS. If it has been more than 60 days, call the IRS at 1-800-829-1040 or use the IRS2Go app to check on your return.
What to do if you made a mistake on your unemployment reporting
If you filed your return and then realized you reported the wrong unemployment amount, or if you forgot to include the 1099-G, you can file an amended return using Form 1040-X. You have three years from the original filing date to amend.
If the IRS contacts you about a mismatch between your return and your 1099-G, respond promptly with documentation. Keep a copy of your 1099-G and any correspondence from your state unemployment office. If your state issued a corrected 1099-G, file an amended return with the correct amount.
Do not ignore IRS notices about unemployment income. The IRS will assess additional tax and penalties if you do not respond. If you receive a notice you do not understand, the IRS has a free helpline at 1-800-829-1040, or you can visit an IRS walk-in office in your area.
Frequently Asked Questions
Do I have to report unemployment if I only got a small amount?
Yes. All unemployment benefits are taxable income and must be reported on your tax return, regardless of the amount. The IRS receives a copy of your 1099-G from your state, so reporting it is required. Even small amounts can affect your tax bill or your may be able to access for certain credits.
Can I get a refund if I did not work at all, only received unemployment?
You can get a refund if you had tax withheld from your unemployment payments and that withholding exceeds your actual tax bill. You can also get a refund if you have refundable tax credits, such as the Earned Income Tax Credit, though the EITC requires some earned income from work. Without withholding or credits, you would owe taxes on unemployment income rather than getting a refund.
What if my state did not send me a 1099-G?
Contact your state unemployment office immediately. You can usually download your 1099-G from your online account or request it by phone. Do not file your return without it — the IRS will receive a copy and will flag your return if the amounts do not match. If your state is delayed, file your return with the amount you remember and attach a note explaining that you are waiting for the 1099-G, then file an amended return when it arrives.
If I owe taxes on unemployment, can I set up a payment plan?
Yes. If your return shows you owe taxes, you can pay in full by the deadline, or you can set up a payment plan with the IRS. You can request a plan online at irs.gov, by phone at 1-800-829-1040, or by mail. The IRS charges interest and a setup fee for payment plans, so paying in full is cheaper if you can.
Does unemployment affect my refund if I also got a stimulus payment?
No. Stimulus payments are not taxable income and do not affect your tax bill or refund. They are separate from unemployment. Report only your unemployment on your tax return. If you received a stimulus payment and did not get it, you may be due a Recovery Rebate Credit, which is claimed on your return separately from unemployment income.