IRS: Unemployment compensation is taxable; have tax withheld now and avoid a tax-time surprise

IRS: Unemployment compensation is taxable; have tax withheld now and avoid a tax-time surprise  https://www.irs.gov/newsroom/irs-unem WASHINGTON — With millions of Americans now receiving taxable unemployment compensation, many of them for the first time, the Internal Revenue Service today reminded people receiving unemployment compensation that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year.  By law, unemployment compensation is taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted this spring.