Withholding

• You can choose to have federal tax withheld from your unemployment payments by completing form W-4V. You can download the form at IRS.gov or order it by calling 800-TAX-FORM. You can have tax withheld from your monthly benefit at a rate of 10 percent by completing IRS form W-4V, checking box 5 and returning it to the office that is responsible for distributing unemployment benefits in your state. If you decide to stop your withholding at a later date, just complete form W-4V and check box 7. You can also pay tax on your unemployment income by making estimated tax payments in equal amounts four times per year: April 15th, January 15th, June 15th, and September 15th.
  
  

Calculation

• You can determine the total amount in unemployment benefits that you were paid as well as the amount of tax withheld by referencing form 1099-G. Enter the total from box 1 of form 1099-G in line 19 of form 1040, line 13 of form 1040A or line 3 of form 1040EZ. Include any tax withheld in the line designated for your tax form. Depending on how much tax you had withheld from your unemployment benefits, and any other job you held during the tax year, you may be refunded taxes or you may owe. There is no way to be certain until you complete your tax return.
  
  

Tools

• You can log on to IRS.gov and use the withholding calculator to help determine whether you are having enough federal tax withheld. The calculator will prompt you to answer a series of questions and use those answers to estimate your withholding amount.