{"id":22355,"date":"2020-09-24T11:51:55","date_gmt":"2020-09-24T15:51:55","guid":{"rendered":"https:\/\/blog.eztaxreturn.com\/?p=22355"},"modified":"2023-06-05T14:03:55","modified_gmt":"2023-06-05T19:03:55","slug":"people-should-have-tax-withheld-from-unemployment-now-to-avoid-a-tax-time-surprise","status":"publish","type":"post","link":"https:\/\/staging.eztaxreturn.com\/blog\/people-should-have-tax-withheld-from-unemployment-now-to-avoid-a-tax-time-surprise\/","title":{"rendered":"People Should Have Tax Withheld From Unemployment Now to Avoid a Tax-Time Surprise"},"content":{"rendered":"\r\n

Due to the Coronavirus pandemic<\/a>, millions of Americans received or are currently receiving unemployment insurance payments, many of them for the first time. It’s important for these individuals to know that unemployment compensation is taxable.<\/p>\r\n\r\n\r\n\r\n

People can have taxes withheld from this compensation now to help avoid owing taxes on this income when they file their income tax return<\/a> next year.<\/p>\r\n\r\n\r\n\r\n

By law, these benefits are taxable and must be reported on a federal income tax return for the tax year it was received. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security Act.<\/p>\r\n\r\n\r\n\r\n

Withholding is voluntary<\/h2>\r\n\r\n\r\n\r\n

Federal law allows recipients to choose a flat 10% withholding from these benefits to cover part or all their tax liability<\/a>. To do this, recipients should complete Form W-4V, Voluntary Withholding Request<\/a>,<\/em> and give it to the agency paying their benefits. Don’t send the form to the IRS<\/a>. If the paying agency has its own withholding request form, use it instead.<\/p>\r\n\r\n\r\n\r\n

Recipients who don’t choose voluntary withholding, or if the withholding isn’t enough, can make quarterly estimated tax payments<\/a>. The payment for the first two quarters of 2020 was due on July 15. Third quarter is due September 15, 2020 and fourth quarter on January 15, 2021. Taxpayers can visit IRS.gov to view all payment options<\/a>.<\/p>\r\n\r\n\r\n\r\n

Here are other types of payments taxpayers should check for withholding<\/h2>\r\n\r\n\r\n\r\n