Yes, you can get a tax refund while unemployed

Being unemployed does not disqualify you from receiving a tax refund. The IRS treats refunds based on income you actually earned and taxes withheld, not on your current employment status. If you had a job for part of the year, received unemployment benefits, or earned income from any source, you may still owe taxes or be due a refund.

The key is whether you earned enough income to require filing and whether taxes were taken out of your paychecks or unemployment payments. Many unemployed people are surprised to learn they are due money back because they did not realize unemployment benefits are taxable income.

Key Takeaways

  • Unemployment benefits are taxable income, and if taxes were withheld from them, you may be due a refund.
  • If you worked part of the year before losing your job, any taxes withheld from those paychecks can still result in a refund.
  • You must file a tax return to receive your refund, even if your total income was low.
  • The IRS does not require you to be employed to file or to receive a refund.

How unemployment benefits affect your tax refund

When you receive unemployment insurance payments, the federal government can withhold income tax from those payments if you request it. Many people do request withholding to avoid a large tax bill later. If taxes were withheld from your unemployment checks, you file a return just like anyone else, and the IRS compares what was withheld to what you actually owe.

You can check whether taxes were withheld by looking at your Form 1099-G, which the state unemployment office sends you by January 31. This form shows the total unemployment you received and how much federal tax was withheld. If the withholding box shows a number greater than zero, you had taxes taken out.

Unemployment benefits are added to any other income you earned that year—wages from a job you held before losing work, self-employment income, interest, or dividends. Your total income determines your tax bracket and how much you owe. If the amount withheld exceeds what you owe, the difference comes back to you as a refund.

Filing requirements when unemployed with low income

You must file a return to receive a refund, even if your income is very low. The IRS will not send you money without a return on file. The income threshold for filing depends on your age and filing status, but if you had any federal tax withheld, you should file regardless of whether you meet the threshold.

For 2024, a single person under 65 with no dependents must file if their gross income was $14,600 or more. However, if you had taxes withheld from unemployment or paychecks, file even if your income was below that amount—that is the only way to recover the withheld money.

You can file online using free software through the IRS Free File program if your income is below a certain level, or you can use a tax professional. Many community organizations and libraries also offer free tax preparation during filing season.

What income counts when you are unemployed

Any money you received during the year that the IRS considers income must be reported. This includes wages from a job you held before being laid off or quitting, unemployment insurance, gig work or freelance income, and certain government benefits. Some benefits like Supplemental Security Income (SSI) are not taxable, but most forms of income are.

If you worked for only part of the year, your employer withheld taxes based on your paychecks during that time. When you file, those withholdings are credited against your total tax liability for the entire year. If you earned less than expected because you lost your job partway through, you may have had too much withheld, resulting in a refund.

How to file your return while unemployed

You file the same way whether employed or not. Gather your Form 1099-G from unemployment, any W-2 forms from employers, and records of other income. If you are filing online, the software will walk you through entering this information and calculating your refund.

When you file, you will need to provide a bank account number for direct deposit if you want your refund sent electronically. Direct deposit is faster than a paper check—refunds typically arrive within 21 days of the IRS accepting your return. If you do not have a bank account, you can request a check by mail, which takes longer.

File as soon as you have all your documents. The IRS begins accepting returns in late January each year. Filing early means your refund arrives sooner and reduces the chance of identity theft using your information.

Tracking your refund status

Once you file, you can track your refund using the IRS Where's My Refund tool on IRS.gov. You will need your Social Security number, filing status, and the exact refund amount. The tool updates once per day and shows whether the IRS has received your return, is processing it, or has issued your refund.

If you filed electronically, the IRS typically accepts your return within 24 hours. Processing usually takes 21 days, though some returns take longer if they require manual review. If your return is delayed beyond 21 days, the Where's My Refund tool will tell you why.

What to do if you have not received your refund

If more than 21 days have passed since the IRS accepted your return and the Where's My Refund tool shows your refund was issued, check your bank account. Direct deposits sometimes take a few extra business days to appear, especially if you filed late in the season.

If the tool shows your refund was issued but you have not received it after 10 business days, or if the tool shows your return is still being processed after 21 days, contact the IRS. You can call the refund hotline at 1-800-829-1040 or visit an IRS walk-in office. Have your return and Social Security number ready.

If you filed by mail, processing takes longer—typically 4 to 6 weeks. Do not call about a mailed return until at least 6 weeks have passed since you mailed it.

Frequently Asked Questions

Do I have to report unemployment benefits as income?

Yes. Unemployment insurance is taxable income and must be reported on your return. The amount appears on your Form 1099-G. However, you can exclude up to $10,200 of unemployment benefits received in 2020 if you meet certain conditions—this was a temporary rule that has expired for later years.

What if I did not work at all during the year but received unemployment?

You still file a return if taxes were withheld from your unemployment payments. Your only income for the year would be the unemployment amount shown on your Form 1099-G. If the withholding exceeds what you owe in taxes, you receive a refund.

Can I file my taxes if I do not have a Social Security number?

You need a valid Social Security number or Individual Taxpayer Identification Number (ITIN) to file. If you do not have one, you must obtain it before filing. Contact the Social Security Administration or the IRS for guidance on getting an ITIN if you are not a U.S. citizen.

Will getting a tax refund affect my unemployment benefits?

No. A tax refund is not considered income for unemployment purposes. It does not reduce your weekly benefit amount or make you ineligible to continue receiving benefits.

What if I owe taxes instead of getting a refund?

If your tax liability exceeds what was withheld, you owe the difference. You can pay when you file online, by mail, or through an installment plan if you cannot pay in full. The IRS offers payment plans with low monthly amounts.