How are Indiana unemployment benefits taxed?
Short answer
They are taxable on both your federal and Indiana returns. DWD puts one 1099-G a year on your Uplink correspondence page, covering the benefits it paid you over that calendar year; the form for the 2025 tax year was there by February 1, 2026.
DWD does not mail your tax statement unless you opted into paper mailing or filed your claim by phone. Everyone else reads it in Uplink.
Getting your 1099-G from DWD
DWD issues one 1099-G per calendar year, covering the benefits it paid you during that year, and posts it to your Uplink correspondence page in the new year. The form for the 2025 tax year was on the page by February 1, 2026, and a later year's turns up in the same place.
It shows the unemployment compensation paid to you in Box 1, and any federal income tax already withheld in Box 4.
Federal tax on your benefits
The IRS treats unemployment compensation as income you generally have to include on your federal return. The Box 1 figure goes on Schedule 1 of Form 1040, and the Box 4 withholding goes on line 25b of the return itself. The IRS sets all of that out on its own page for unemployment compensation.
Indiana's tax, and the deduction to ask about
Unemployment compensation is taxable on your Indiana return as well, and the Department of Revenue tells you to use the 1099-G that DWD issued when you file.
Indiana may then tax a smaller amount of it than your federal return does, through the state's Unemployment Compensation Deduction. Enclosing your 1099-G is how the deduction is claimed, and it sits on the Department of Revenue's list of deductions.
Having tax taken out as you go
You can choose to have federal income tax withheld from unemployment compensation, using the IRS's Form W-4V, the voluntary withholding request. You may be required to make quarterly estimated tax payments instead. Anything withheld through the year turns up in Box 4 when the form arrives.
Offices and phone numbers has DWD's line for questions about your own claim.
If the form is wrong, or you never filed a claim
Your form counts every dollar DWD actually paid you. A repayment you sent in afterwards does not shrink it, and DWD cannot reduce it, so that repayment is yours to account for when you file. An offset is the other case: money DWD held back out of a weekly payment to cut an overpayment balance never reached you, so it was never in the total and there is nothing there to deduct.
How DWD collects a balance, and where those weekly offsets come from, is on denials, appeals, and overpayments.
If a form arrives for a claim you never filed, report the claim on DWD's fraud page, then complete and return State Form 57068 so the identity theft investigation can finish.
A form for someone who has died is requested by mail, with your relationship to them, the last 4 digits of their Social Security number, and a copy of the death certificate among what DWD asks for. Mail the request to the Indiana Department of Workforce Development, 10 North Senate Avenue, Indianapolis, IN 46204. DWD's 1099-G page carries the rest of the list.
Official sources
- Indiana Unemployment: 2025 Individual Income Tax Information for Unemployment Insurance RecipientsIndiana Department of Workforce Development
- DOR: Form 1099-GIndiana Department of Revenue
- DOR: DeductionsIndiana Department of Revenue
- Topic no. 418, Unemployment compensation | Internal Revenue ServiceInternal Revenue Service
- Indiana Unemployment: Report Unemployment FraudIndiana Department of Workforce Development
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