 TITLE: Do You Have to Pay Taxes on Unemployment Benefits? CONTENT: How Much Are Unemployment Benefits Taxed?\n-----------------------------------------\nAt the federal level, unemployment benefits are treated the same as other types of ordinary income. The federal income tax brackets, which range from 10% to 37%, will determine how much you pay.\nWhich bracket you fall into depends on your total income minus deductions and credits, with the rate you'll pay being determined on a per-dollar basis—you won't pay the same rate for every dollar you made during the year.\nIt works something like this: If you file as single in 2020, you can automatically receive a $12,400 standard deduction, which reduces your taxable income. As a result, you won't have to pay any federal income taxes on the first $12,400 you make—you might not even have to file a federal tax return. The next $9,875 you make falls into the 10% tax bracket, with the 12% bracket after that covering income from $9,876 to $40,125, and so on (there are five brackets after the 12% bracket).\nAs the amount you earn climbs, new earnings are pushed into new brackets, but the rate that applies on lower-dollar earnings stays the same. Even if you make $1 million in a year, you still receive the standard deduction, pay 10% on the first $9,875, 12% on the next portion, on up to the top tax rate of 37% for income above $518,400.\nAs a result, your unemployment benefits may be taxed federally anywhere from 0% to 37%. END