Does New York State tax unemployment benefits?

The tax applies if you are required to file a return, and it covers all the benefits NYSDOL paid you in the calendar year. For questions about your own return, NYSDOL points you to the IRS or a tax professional.

How benefits are taxed in New York

NYSDOL says your benefits are subject to federal, New York State, and local income tax. You report them on both your federal and your New York State returns, using the figures on the Form 1099-G that NYSDOL sends you.

If you live in New York City or Yonkers, New York State's tax instructions say your city or Yonkers income tax, like your state tax, is based on what you reported on your federal return, and that return includes your benefits. NYSDOL also reports what it paid you to the Internal Revenue Service and the New York State Department of Taxation and Finance.

Having tax withheld from your payments

Withholding is your choice. You can have 10% of each payment withheld for federal income tax, 2.5% withheld for New York State income tax, or both taxes withheld, and NYSDOL takes the tax out only after mandatory deductions such as child support.

You can start or stop either one at any time:

1. Sign in to your online account with your NY.GOV ID.
2. Open Unemployment Services, then Payment and Tax Withholding Options.
3. Choose Tax Withholding and follow the instructions.

You can also make the change by phone through the Telephone Claims Center at (888) 209-8124, with your Social Security number and PIN ready.

NYSDOL cannot give back tax it has withheld. Only the IRS or the state can return it, as part of your income tax refund.

Getting your Form 1099-G from NYSDOL

Form 1099-G, the Statement for Recipients of Certain Government Payments, shows the benefits NYSDOL paid you in a calendar year, any adjustments, and any tax withheld. The form is not a bill.

• By mail: NYSDOL mails a 1099-G in January to everyone it paid benefits the year before, at the address on file. The forms for benefits paid in 2025 went out in January 2026.
• Online: your 1099-G is in your online account by mid-January. Open Unemployment Services and choose the option to view and print it. Forms for earlier years are there too.
• By phone: call (888) 209-8124 and follow the automated instructions to have a 1099-G mailed to you.

If your 1099-G is wrong

A wrong address on the form does not affect your return, as long as the Social Security number on it is correct. If you disagree with anything else on it and no one has used your identity, fill out the Request for 1099-G Review on NYSDOL's 1099-G page and send it back through your online account, by fax, or by mail. NYSDOL reviews it and sends you an amended 1099-G or a letter of explanation.

If a 1099-G or tax bill shows a claim you did not file

Someone may have claimed benefits in your name. If the 1099-G came from NYSDOL, or a bill came from the New York State Department of Taxation and Finance:

1. File a fraud report through NYSDOL's Report Fraud page, and answer Yes to the question about a 1099-G or tax notice for benefits you never received. Do this even if you reported the fraud before.
2. NYSDOL reviews your report and sends you a corrected 1099-G as appropriate. The corrected form comes by mail and is not posted to your online account.
3. If the Tax Department sent you a bill, send it the corrected 1099-G for review, following the instructions on its notice.

If the bill came from the IRS, or the 1099-G came from another state, report the fraud to the state that paid the benefits, even if you live in New York, and ask that state for a corrected Form 1099-G.