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Indiana Department of Workforce Development

DWD > Unemployment for Individuals > Unemployment Information > 2011 Individual Income Tax Information for Unemployment Insurance Recipients 2011 Individual Income Tax Information for Unemployment Insurance Recipients

Understanding your 1099-G

DWD will mail tax statements (Form 1099-G) to anyone who received unemployment benefits in 2011 in January of 2012.

If you do not receive your 1099-G in the mail, you should visit your local full service WorkOne Center in person to request a duplicate after February 13, 2012. Please note, your 1099-G will be mailed to the address that was on file with DWD as of December 31, 2011.

Unemployment Insurance recipients can update their address through the online benefits filing system, "Uplink", at http://www.in.gov/dwd/2362.htm or their local WorkOne Center.

Why aren’t state and local taxes withheld from my benefits?
DWD does not currently have the ability to withhold state and local taxes from your benefits. The only taxes that can be withheld are federal taxes, but you must elect to have taxes withheld. The ability to withhold state taxes from your benefits will be added to Uplink soon. You will be notified of this change as soon as it occurs.  

Paying Taxes on Your Benefits:

Unemployment benefits are taxed at the federal, state and local levels. Some Hoosiers may qualify for Indiana’s Unemployment Insurance deduction.  See the chart below for the appropriate form to report unemployment benefits and determine eligibility for the deduction.

State Tax Return Form

Report Benefits (Income)

Unemployment Deduction

IT-40 (full-year resident)

Schedule 1

Schedule 2

IT-40NPR (part-year resident)

Schedule B

Schedule C

IT-40EZ (easy filing)

Worksheet on Back

Worksheet on Back

For more information about unemployment compensation and state taxes, visit http://www.in.gov/dor/4261.htm. State tax forms may also be found online at www.in.gov/dor/4167.htm

Earned Income Tax Credit:

Unemployment Recipients may also qualify to receive the Earned Income Tax Credit (EITC), which is designed to help low to moderate income working individuals and families. If you have any questions about the Earned Income Tax Credit please see Indiana Department of Revenue’s website dedicated to EITC at http://www.in.gov/dor/3803.htm#earnedincome

Free Income Tax Preparation:

Free income tax preparation and filing is available through Free File, a public-private partnership between the Internal Revenue Service and a number of electronic software companies. Free File provides free on-line Federal tax preparation and e-filing services to low and moderate income taxpayers. Free File and other resources for free income tax preparation and filing can be found at http://www.freefile.irs.gov/.

For more information:

U.S. Internal Revenue Service: 800-829-1040 www.irs.gov/

Indiana Department of Revenue: 317-232-2240 www.in.gov/dor