A reminder from the state: Unemployment benefits are subject to income tax

A reminder from the state: Unemployment benefits are subject to income tax
State of Hawaii, Honolulu unemployment office (Source: None)

HONOLULU, Hawaii (HawaiiNewsNow) - Tens of thousands of Hawaii residents have turned to unemployment benefits amid the pandemic to help keep them afloat.

First-time filers may not know, however, that those benefits are subject to income tax.

That could leave many people with a surprise bill when tax time rolls around, especially for those who received $600 increases to their unemployment payments.

“Claimants have the choice to have federal and state taxes deducted or not from weekly benefits checks when applying for unemployment insurance benefits or assistance and may only change that choice once during a claim year,” said Labor Director Anne E. Perreira-Eustaquio.

She said the department will mail out 1099-G forms on Jan. 27 to alert people of their tax obligations. The advice if you can’t pay it all at once: File your taxes and pay as much as you can.

You can also seek set up installment plans with the state and IRS.

Claimants can access their total benefits and the amount of taxes withheld by logging in at uiclaims.hawaii.gov.

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