Yes, you can get a tax refund while unemployed—but only if you had taxes withheld or paid during the year

A tax refund is money the IRS owes you because you paid more in taxes than you actually owed. Being unemployed does not disqualify you from receiving one. What matters is whether you had income during the year and whether taxes were taken out of it.

If you received unemployment benefits, those are taxable income. If you had a job for part of the year before losing it, taxes may have been withheld from your paychecks. If you had self-employment income or gig work, you may have paid estimated taxes. Any of these situations can result in a refund when you file.

The key is filing a tax return. The IRS will not send you a refund unless you file—even if you are owed one. Many unemployed people skip filing because they assume their income was too low, but that assumption costs them money.

Key Takeaways

  • You must file a tax return to receive a refund, even if no one withheld taxes from your income during the year.
  • Unemployment benefits are taxable income, and if taxes were not withheld from them, you may owe tax or may have overpaid through other income sources.
  • If you had a job for part of the year, taxes withheld from those paychecks can result in a refund when you file.
  • The IRS Free File program lets you file for free if your income is below a certain threshold, which changes each year.

When unemployment benefits create a tax refund

Unemployment benefits are considered taxable income by the federal government. When you receive them, you have the option to have taxes withheld—usually 10 percent—or to receive the full amount and pay taxes when you file your return.

Most people choose not to have taxes withheld because they need the money when ready. This means when you file your tax return, you owe tax on those benefits. However, if you also had other income during the year—from a job you held before losing it, from a spouse, from self-employment—your total tax bill might be lower than the taxes already withheld from that other income. The difference is your refund.

Example: You worked January through March and earned $8,000 with $800 withheld for taxes. You then received $12,000 in unemployment benefits with no withholding. Your total income is $20,000. Depending on your filing status and deductions, your actual tax bill might be $1,200. Since $800 was already withheld, you would receive a $0 refund (or owe $400). But if your actual tax bill turns out to be $600, you get a $200 refund.

Income thresholds and filing requirements when unemployed

You are required to file a federal tax return if your income exceeds a certain threshold. That threshold depends on your age, filing status, and type of income. For 2023, a single person under 65 with only wages must file if they earned more than $13,850. The threshold is lower if you are self-employed.

Unemployment benefits count toward this threshold. If you received $12,000 in unemployment and had no other income, you would be below the threshold and technically not required to file. However, you should still file because you may be owed a refund—especially if you had taxes withheld from other income or if you are may have access to to refundable tax credits like the Earned Income Tax Credit (EITC).

The EITC is a refundable credit, meaning you can receive money from it even if you owe no tax. If you had any earned income during the year—even a few weeks of work—you may be may have access to to this credit. Filing is the only way to claim it.

How to file your return when unemployed

The IRS Free File program allows you to file your federal return for free if your income is below a certain limit. In 2024, that limit is $79,000 for most filers. If you are unemployed, your income is likely below this threshold.

You can access Free File through the IRS website at irs.gov. The program offers several free tax software options. You choose one, enter your information, and file electronically. The software walks you through questions about your income, deductions, and credits. If you are owed a refund, you can choose to have it deposited directly into your bank account, which is faster than a paper check.

If your income is above the Free File threshold or you prefer to work with someone, you can pay a tax preparer or use commercial tax software. Many community organizations also offer free tax preparation during tax season, particularly for low-income filers. Search "free tax preparation near me" or contact your local 211 service to find options in your area.

Documents you need to file while unemployed

Gather these documents before you start your return. If you had a job during the year, you will receive a W-2 form from your employer by January 31. This shows your wages and the taxes withheld.

If you received unemployment benefits, your state unemployment office will send you a 1099-G form by January 31. This shows the total benefits you received and any taxes withheld. Keep this form—you will need it to file accurately.

If you had self-employment income or gig work (delivery, freelance, etc.), you may receive a 1099-NEC or 1099-MISC form if you earned more than $600 from a single source. You will also need records of your expenses if you are claiming deductions.

Have your Social Security number, date of birth, and bank account information (if you want direct deposit) ready. If you are married filing jointly, you will need the same information for your spouse.

Refunds when you had no income withheld

If you received unemployment benefits with no taxes withheld and had no other income during the year, you will not receive a refund. You may actually owe tax on those benefits. However, if your total income is low enough, you may owe nothing at all.

The standard deduction—the amount of income you can earn tax-free—is $13,850 for a single person in 2023. If your unemployment benefits are below this amount, you owe no federal income tax and will not receive a refund, but filing still makes sense if you are may have access to to refundable credits.

If you had other income sources during the year—a part-time job, a spouse's income, investment income—the calculation changes. File your return to see whether you are owed money or owe tax.

State tax refunds while unemployed

Most states also tax unemployment benefits, though a few do not. State tax rules vary significantly. Some states follow federal rules closely; others have different thresholds and credits.

When you file your federal return, you will also file a state return (if your state has income tax). The state return uses similar information but applies your state's tax rates and rules. You may receive a state refund, a federal refund, both, or neither—it depends on your specific situation and your state's rules.

Check your state's tax agency website or ask your tax preparer about state-specific credits for unemployed workers. A few states offer temporary credits or deductions during periods of high unemployment, though these are not permanent.

Frequently Asked Questions

Do I have to file a tax return if I only received unemployment benefits?

You are not required to file if your unemployment income is below the threshold for your filing status. However, you should file anyway if you had any other income during the year or if you think you might be may have access to to tax credits. Filing is the only way to claim refundable credits like the EITC.

What if I did not receive a W-2 or 1099-G form?

Contact your employer or your state unemployment office directly. Forms must be issued by January 31. If you do not receive one by mid-February, call and request a copy. You can also file your return without the form if you remember the amounts, but having the actual form is more reliable.

Can I get a refund if I had taxes withheld from unemployment benefits?

Yes. If you chose to have taxes withheld from your unemployment benefits and your actual tax bill is lower than the amount withheld, you will receive a refund. The amount depends on your total income for the year and your deductions and credits.

How long does it take to receive a refund?

If you file electronically and choose direct deposit, the IRS typically issues refunds within 21 days. Paper checks take longer—usually four to six weeks. State refunds may take additional time depending on your state's processing speed.

What if I owe taxes instead of getting a refund?

If you owe tax, you can pay in full when you file, or you can set up a payment plan with the IRS. The IRS offers installment agreements for amounts you cannot pay when ready. You can set this up through the IRS website or by calling the number on your tax bill.