The Internal Revenue Service wants to remind people receiving unemployment compensation that those benefits ARE TAXABLE WAGES. Many people receiving these benefits don’t have tax withheld and will be in for a surprise when they owe more taxes, or receive less of a refund, when they file their federal income tax return for the 2020 year.
Federal law allows any recipient to choose to have a flat 10% withheld from their benefits to cover part or all of their tax liability. To do that, fill out Form W-4V, Voluntary Withholding Request (PDF), and give it to the agency paying the benefits. Don’t send it to the IRS. If the payor has its own withholding request form, use it instead.
For more information see https://www.irs.gov/taxtopics/tc418