Division of Unemployment Insurance URL reading ( My Unemployment . NJ . Gov )

Federal income taxes on Unemployment Insurance benefits

IRS 1040 form

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 percent 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 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.

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. The 1099-G form will be available to download from your online dashboard in January. This information is also sent to the IRS.