Unemployment compensation is fully taxable to the individual receiving the compensation.

Name: Unemployment compensation is fully taxable to the individual receiving the compensation.
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Unemployment compensation is considered taxable income and is subject to federal income tax. Some states also tax unemployment benefits. However, individuals receiving unemployment compensation can choose to have taxes withheld from their payments to avoid a large tax bill at the end of the year.

Unemployment Compensation Is Fully Taxable to the Individual Receiving the Compensation