Michigan UIA: Unemployment Benefits And Taxes–Calculating Your Taxable Income

In our final post in this series of articles on unemployment benefits we will explain how you can calculate the taxable income element from the unemployment benefits you received from Michigan’s Unemployment Insurance Agency or UIA. We will also look into how you can look at the total income tax deductions withheld on your behalf by the UIA, if you chose to submit the Income Tax Withholding form UIA 1581.

How To Calculate Your Tax Deductible Income

Calculating the total unemployment benefits received in a given tax year is simple enough. Even if you do not have personal records (always a good idea), did not request direct debit payments (another good idea) you can still find these totals in your yearly 1099G form.

The 1099G form is mailed in January to any worker who received a tax refund or unemployment benefits. The form details any amounts you received from the government which may be considered eligible for your federal adjusted gross income. This only applies if you itemize your deductions. However, duplicate forms are not available so keep your 1099G form in a safe place.

You should receive your 1099-G within the month of January or in the first week of February (at the very latest). Last year Michigan’s UIA mailed over 913,000 1099-G forms to workers who had received unemployment benefits the previous year.

If you registered an online account with the Michigan UIA, you can view your online 1099-G statement online here.

Note that you can easily calculate the total benefits you received in a tax year by reviewing your bank statements if you opted for direct debit payments. As we will discuss in future articles setting this method of payments is easy, allows for speedier payments and provides the added convenience of managing your payments through your bank statements (whether online or by mail).

How to View Your Income Tax Deductions

If you authorized the Michigan UIA to withhold your income tax from your unemployment benefit payments, you can view these deductions on the same 1099G form we describe above.

IMPORTANT NOTICE

Your 1099-G form may indicate you received more benefits than what you actually received. This could happen because the 1099-G form includes payments which later may have been offset by restitution or court ordered deductions you have already paid back. If this is your situation contact the Internal Revenue Service (IRS) and ask how these extra deductions affect your income tax payments.