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Unemployment Compensation & State Taxes

There are two things you need to know when you have unemployment compensation income.

Unemployment compensation is taxable. Your unemployment compensation is taxable on both your federal and state tax returns.

You may be eligible for a deduction. You may be able to reduce or even eliminate any state tax due on your unemployment compensation. Be sure to complete the unemployment compensation deduction worksheet found in the income tax instruction booklet.

Below you will find some frequently asked questions and tips for next year if you continue to receive unemployment compensation.

If you have any questions, you may call DOR at 317-232-2240, Monday through Friday, 8 a.m. - 4:30 p.m., EST.

Frequently Asked Questions

How can I get some information about the 1099G I got from the Department of Workforce Development?
How can I file my state income taxes for free?
Does the Indiana Department of Revenue (DOR) have a payment plan option?
Where do I find information for estimated tax and getting an extension of time to file?
How do I contact the DOR?

Planning for Next Year

If you continue to receive unemployment compensation in 2018, keep in mind the following tips to help plan and reduce your stress for next tax season:

  • Keep track of possible deductions and credits you might be able to plan on.
  • Put some money back to ensure you are able to pay your taxes in 2019.
  • Find out how to pay estimated tax.
  • Visit the Indiana Department of Workforce Development to learn more about filing for unemployment and/or signing up to have Indiana State and county tax withheld. This way you won't need to pay all your tax at one time (when you file).

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