People who are jobless, looking for a job, and available for work are unemployed. Such individual may be eligible to apply for government-sponsored unemployment benefits, known as unemployment insurance. This is a joint state-federal program that provides cash benefits to eligible workers.
If you received unemployment benefits, you will be were considered to be unemployed for all or part of the tax year.
You must report unemployment benefits as earned income on your Federal tax return. You will receive a Form 1099-G for this. https://www.irs.gov/forms-pubs/about-form-1099-g
If you live in a state or city, that requires income taxes, then you may also be required to report unemployment benefits on these tax returns as well. If you are unsure, check the website for your state, county, or local unemployment office, or contact them directly.
Unemployment benefits may or may not count toward the income requirements for some tax credits. For example, with the earned income tax credit (EITC), unemployment benefits do not count as earned income. For other potential tax credits, it depends on their specific rules.
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