Unemployment compensation, including union-related benefits (such as supplemental unemployment benefits), is generally taxable income and must be reported on your federal tax return. If you received unemployment compensation in 2025, you will typically receive a Form 1099-G from your state unemployment agency showing the total amount paid in Box 1. In some union or employer-sponsored plans, payments may instead be reported on a Form W-2 or Form 1099-MISC/1099-NEC depending on how the plan is structured.
You must report the taxable amount on Schedule 1 (Form 1040), Line 7, labeled “Unemployment compensation,” unless the payments are treated as wages (see union scenarios below). This amount then flows to Form 1040, Line 8 as part of total income.
Reporting Details
- • Line 7 of Schedule 1: Enter the full amount shown in Box 1 of your Form 1099-G. If you repaid any unemployment compensation in the same year, report only the net amount and write “Repaid” and the amount on the dotted line. If you repaid benefits from a prior year, see Publication 525 for claim-of-right rules.
• No reduction for contributions: You cannot reduce unemployment compensation by contributions made to unemployment funds or programs. The full amount is generally taxable.
• Withholding option: You may elect federal income tax withholding on unemployment compensation using Form W-4V (Voluntary Withholding Request)
Union-Specific Scenarios
• State unemployment benefits (with union involvement): Report using Form 1099-G on Schedule 1, Line 7.
• Union supplemental unemployment benefits (SUB pay):
- If structured as a wage continuation plan, payments are treated as wages, reported on Form W-2, and entered on Form 1040, Line 1.
- If not treated as wages, they may be reported on Form 1099-G or another information return and reported on Schedule 1, Line 7.
• Strike benefits from a union: Generally not taxable if paid from union dues (not a governmental unemployment program), and therefore not reported as income.
Additional Considerations
- Unemployment compensation is subject to federal income tax and may also be taxable at the state level depending on state law.
• Always report the income based on the type of form received (W-2 vs 1099-G vs other), as this determines where it is entered on the return.
Source:
Form 1040 Instructions for Schedule 1, Line 7 – Unemployment Compensation
Disclaimer: Always verify details with the current year’s IRS Form 1040 and Schedule 1 instructions, as well as your state’s Department of Revenue or Unemployment Office. For complex situations, consult a tax professional or CPA.