Taxes and deductions for unemployment benefits

Learn more about the taxes and deductions you need to pay while collecting unemployment insurance benefits.

You’re responsible for paying federal and state income taxes on the benefits you receive. The Department of Unemployment Assistance (DUA) does not automatically withhold taxes, but you may request that taxes be withheld from your weekly benefits when you apply.

Your weekly benefits may also be reduced if you have a child support order or if you receive an overpayment on your weekly benefit.

What to know

Your unemployment benefits are taxable. If you want taxes withheld from your weekly benefit payments, you must tell us this when you apply. To do this, you may:

  • Fill out the tax withholding section of UI Online
  • Call the TeleCert line or the TeleClaim Center

If you don’t want to have taxes withheld from your weekly benefits, you will be responsible for paying federal and state taxes directly later.

Current tax withholding rates

Federal income taxes: 10%
Massachusetts state income taxes: 5.1%

Tax forms

We’ll send you the tax form you need by Jan. 31 of the year after you receive benefits. This tax form is called Form 1099-G.

Other deductions

Child support payments

If you have a child support order from any state, you must tell us when you file for unemployment benefits. Your benefits will be reduced by the amount of the child support order.

Overpayment of benefits

If you are paid more than you were eligible for (an overpayment) by Massachusetts or any other state, your future weekly benefits may be reduced to make up for the overpayment.

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