New York State Tax Department shares money-saving resources to assist New Yorkers; reminds taxpayers unemployment insurance payments are taxable income
Guest Editorial by the New York State Department of Taxation and Finance
The New York State Department of Taxation and Finance encourages New Yorkers to review their current tax situation. By taking a closer look at your tax records now, you can ensure you don’t end up owing unpaid taxes, and you may be able to claim valuable tax credits when you file your income tax return next year.
“We know that many taxpayers are facing challenges this year, and we want to remind them of all the valuable tax credits available here in New York,” New York State Commissioner of Taxation and Finance Mike Schmidt said. “We also want taxpayers to understand that unemployment insurance payments are taxable. As a result, some taxpayers may need to adjust their withholding to prevent a tax bill in 2021.”
Unemployment Benefits are Taxable Benefits
If you are receiving unemployment benefits, consider having tax withheld from these payments to avoid owing taxes when you file your federal and New York state income tax return next year. New York state unemployment insurance benefits and any of the special unemployment compensation authorized under the Coronavirus Relief Act are considered taxable income. By law, the New York State Department of Labor must report these benefits to the IRS and to the New York State Tax Department.
We encourage you to review your records and, if necessary, adjust your tax withholdings. You can change your tax withholding option on the DOL website. Doing this could help you avoid a tax bill next year. To start or stop the withholding of federal or state taxes from your weekly benefits:
√ Login to labor.ny.gov/signin with your NY.gov ID
√ Click “Unemployment Benefits”
√ Click “Payment and Tax Withholding Options”
√ Click “Tax Withholding” and follow the instructions
In January 2021, unemployment benefit recipients must access Form 1099-G, which reports Certain Government Payments, from the NYS Department of Labor website. The 1099-G will show the amount of unemployment benefits received during 2020. Recipients must report this information, along with information from other income tax forms such as Form W-2, on their 2020 federal and New York income tax returns.
Tax Credits Put Money Back in Your Pocket
New York state has one of the most generous individual tax credit programs in the nation. Each year, thousands of New Yorkers qualify for various tax credits for the first time as their filing status or personal financial situation changes.
For a complete list of the numerous tax credits available for individuals, homeowners, renters, college students, working families and others, visit the Tax Department’s Income tax credits webpage.