Is Pennsylvania unemployment taxable?

For income tax, benefits count in the calendar year they are paid, even when you applied or claimed those weeks in an earlier year. L&I issues no form for a calendar year in which you were paid less than $10.01.

Finding your UC-1099G tax form

If you are looking for a W2 for your unemployment benefits, the form you need is Form 1099-G, Certain Government Payments, which L&I calls Form UC-1099G. It shows your total benefits from the Office of Unemployment Compensation for the previous year, along with any adjustments or tax withholding. On the form, Box 1 is the unemployment compensation paid to you, and Box 4 is any federal income tax withheld.

L&I mails the form by January 31 each year, and you must include its information when you file your taxes for that year. If it never arrived or you misplaced it, download it from your UC dashboard, your account on L&I's UC benefits site.

If the amount on your 1099-G is wrong

If the Total Payment or Tax Withheld on your Form UC-1099G looks wrong, contact the UC Service Center at 888-313-7284. L&I recalculates every payment made to you and every amount withheld, compares the result with your form, and issues an amended Form UC-1099G if the amount is incorrect.

If the form lists benefits you never claimed

If you received a 1099-G even though you returned the money and submitted an identity theft complaint, contact the UC Service Center at 888-313-7284 or UChelp@pa.gov.

Do not wait for a revised 1099-G to file your taxes. The IRS says to report only your true income and to leave out what was reported in your name by fraud. You also do not need the extra form the IRS normally asks for when someone reports identity theft.

To report the fraud itself, use L&I's report fraud page or call the PA Fraud Hotline at 1-800-692-7469. If you suspect you are a victim of identity theft, also file a police report with your local law enforcement agency.

Federal income tax and withholding

The IRS says that, generally, you must include all unemployment compensation you receive in your income. You can choose to have federal income tax withheld from your UC payments at 10%, figured on each payment after any adjustment for earnings. To start or stop it, change your federal withholding status in your UC dashboard.

If you do not have tax withheld, the IRS says you may be required to make quarterly estimated tax payments instead. The IRS page on unemployment compensation covers how to report your benefits.

Pennsylvania income tax on your benefits

Pennsylvania's Department of Revenue lists unemployment compensation among the income items never taxable as Pennsylvania compensation. The full list is in the Department of Revenue's gross compensation guide.