Are claimants required to pay taxes on UI benefits?
Yes, the Federal Tax Reform Act of 1986 provides for federal taxation on UI benefits. Claimants may voluntarily request that EDD withhold 10 percent of weekly benefits for federal taxation of UI benefits. This voluntary withholding request is contained in question seven on the Continued Claim Certification, DE 4581. The voluntary withholding request must be made each week that the claimant wishes to have federal taxes withheld from benefits.
