Taxes on Unemployment Benefits: A State-by-State Guide
Don't be surprised by an unexpected state tax bill on your unemployment benefits. Know where unemployment compensation is taxable and where it isn't.
As the COVID-19 pandemic drags on, more and more Americans are getting an unwanted crash course on the U.S. unemployment compensation system. There are a lot of common questions for people seeking unemployment benefits for the first time. How do I apply for benefits? How much will I get? How long will the benefits last? People need answers to these questions right away. But, before long, another question will likely spring to mind: Will I have to pay taxes on my unemployment benefits?
When it comes to federal income taxes, the general answer is yes. Uncle Sam taxes unemployment benefits as if they were wages (although up to $10,200 of unemployment compensation received in 2020 is exempt from federal tax for people with an adjusted gross income below $150,000). However, when it comes to state income taxes, it depends on where you live. Most states fully tax unemployment benefits. However, some states don't tax them at all (sometimes because the state doesn't have an income tax), and a handful of states will only tax part of your benefits. Plus, like the federal government, some states are making special exceptions to their general rule for 2020 and/or 2021 to help people who lost their job because of the pandemic.
Where does your state stand when it comes to taxing unemployment benefits? Read on to find out. We'll also let you know which states have issued guidance on how they're going to handle the federal $10,200 exemption for unemployment compensation received in 2020. Then, as a bonus, we outline each state's income, sales, and property tax levels — and provide a link to the state's page in our State-by-State Guide to Taxes on Middle-Class Families — so you can get a sense of the overall tax burden where you live.
Alabama
State Taxes on Unemployment Benefits: Alabama does not tax unemployment benefits. In addition, the first $25,000 received from an employer as severance pay, unemployment compensation, and the like as a result of "administrative downsizing" is not taxed.
State Income Tax Range: Low: 2% (on up to $1,000 of taxable income for married joint filers and up to $500 for all others). High: 5% (on more than $6,000 of taxable income for married joint filers and more than $3,000 for all others). Some Alabama municipalities also impose occupational taxes on salaries and wages.
Sales Tax: 4% state levy. Localities can add as much as 7.5% to that, and the average combined rate is 9.22%, according to the Tax Foundation.
Property Taxes: In Alabama, the median property tax rate is $395 per $100,000 of assessed home value.
For more information, go to the Alabama State Tax Guide for Middle-Class Families.
Alaska
State Taxes on Unemployment Benefits: Alaska does not tax unemployment compensation.
State Income Tax Range: There is no state income tax.
Sales Tax: Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can go as high as 7.5%. But, according to the Tax Foundation, the statewide average is only 1.76%.
Property Taxes: In Alaska, the median property tax rate is $1,182 per $100,000 of assessed home value.
For more information, go to the Alaska State Tax Guide for Middle-Class Families.
Arizona
State Taxes on Unemployment Benefits: Arizona generally taxes unemployment compensation to the same extent as it is taxed under federal law. However, the state has not adopted the federal exclusion for up to $10,200 of unemployment compensation received in 2020. This could change later if the state enacts a law to adopt the exemption.
State Income Tax Range: Low: 2.59% (on up to $54,544 of taxable income for married filers and up to $27,272 for single filers). High: 4.5% (on $327,263 and over of taxable income for married joint filers and $163,632 and over for single filers). Starting in 2021, Proposition 208 (approved by voters on the November 3, 2020, ballot) imposes a 3.5% surtax on taxable income over $500,000 for joint filers and over $250,000 for single taxpayers.
Sales Tax: 5.6% state levy. Localities can add as much as 5.6% to that, but the average combined levy is 8.4%, according to the Tax Foundation.
Property Taxes: Arizona's median property tax rate is $617 per $100,000 of assessed home value.
For more information, go to the Arizona State Tax Guide for Middle-Class Families.
Arkansas
State Taxes on Unemployment Benefits: Arkansas normally taxes unemployment benefits. However, unemployment compensation paid in 2020 and 2021 are exempt from tax.
State Income Tax Range: Low: 2% (on taxable income from $4,500 to $8,899 for taxpayers with net income less than $22,200), 0.75% (on first $4,499 of taxable income for taxpayers with net income from $22,200 to $79,300), or 2% (on on first $4,000 of taxable income for taxpayers with net income over $79,300). High: 3.4% (on taxable income from $13,400 to $22,199 for taxpayers with net income less than $22,200), 5.9% (on taxable income from $37,200 to $79,300 for taxpayers with net income from $22,200 to $79,300), or 6.6% (on taxable income over $79,300 for taxpayers with net income over $79,300). Beginning in 2021, the top rate for taxpayers with net income over $79,300 is 5.9% (on taxable income over $8,000). A "bracket adjustment" of between $40 and $440 is subtracted from the amount of tax due for taxpayers with net income from $79,301 to $84,600.
Sales Tax: 6.5% state levy. Localities can add as much as 5.125%, and the average combined rate is 9.51%, according to the Tax Foundation.
Property Taxes: The median property tax rate for Arkansas homeowners is $612 per $100,000 of assessed home value.
For more information, go to the Arkansas State Tax Guide for Middle-Class Families.
California
State Taxes on Unemployment Benefits: Californians do not have to pay state income taxes on unemployment benefits.
For people who have not yet filed their 2020 California income tax return, the state is currently updating its instructions to account for the federal $10,200 exemption for unemployment compensation received in 2020.
State Income Tax Range: Low: 1% (on up to $17,864 of taxable income for married joint filers and up to $8,932 for those filing individually). High: 13.3% (on more than $1,198,024 for married joint filers and $1 million for those filing individually).
Sales Tax: 7.25% state levy. Localities can add as much as 2.5%, and the average combined rate is 8.68%, according to the Tax Foundation.
Property Taxes: In California, the median property tax rate is $729 per $100,000 of assessed home value.
For more information, go to the California State Tax Guide for Middle-Class Families.
Colorado
State Taxes on Unemployment Benefits: Colorado taxes all unemployment benefits.
When filling out your 2020 Colorado income tax return, you must add back the amount of any unemployment compensation excluded from your federal taxable income under the American Rescue Plan Act. This amount should be added to Line 6 (other additions) of your Colorado return, along with any other addbacks required by law. In the explanation field, enter "Unemployment Compensation."
Income Tax Range: Colorado has a flat income tax rate of 4.55% (the approval of Proposition 116, which appeared on the November 2020 ballot, reduced the rate from 4.63% to 4.55%). The state also limits how much its revenue can grow from year-to-year by lowering the tax rate if revenue growth is too high. For example, in 2019, this resulted in a rate reduction to 4.5%. Denver and a few other cities in Colorado also impose a monthly payroll tax.
Sales Tax: 2.9% state levy. Localities can add as much as 8.3%, and the average combined rate is 7.72%, according to the Tax Foundation.
Property Taxes: In Colorado, the median property tax rate is $494 per $100,000 of assessed home value.
For more information, go to the Colorado State Tax Guide for Middle-Class Families.
Connecticut
State Taxes on Unemployment Benefits: Connecticut taxes unemployment compensation to the same extent as it is taxed under federal law. As a result, any unemployment compensation received in 2020 (up to $10,200) exempt from federal income tax is not subject Connecticut income tax. If you already filed your federal and Connecticut returns, and you're required to amend your federal return, amend your Connecticut return by filing Form CT-1040X using the federal AGI you reported on your amended federal return. If you're not required to amend your federal return (i.e., you anticipate that the IRS will recalculate your return automatically), don't amend your Connecticut return at this time. The state is waiting for more guidance from the IRS on how recalculations will be reported to taxpayers and state taxing agencies.
State Income Tax Range: Low: 3% (on up to $20,000 of taxable income for married joint filers and up to $10,000 for those filing individually). High: 6.99% (on the amount over $1 million for married joint filers and over $500,000 for those filing individually).
Sales Tax: The state taxes most items at 6.35%, and localities are not allowed to add to that.
Property Taxes: The median property tax rate for Connecticut residents is $2,139 per $100,000 of assessed home value.
For more information, go to the Connecticut State Tax Guide for Middle-Class Families.
Delaware
State Taxes on Unemployment Benefits: Unemployment compensation is usually taxed in Delaware. However, unemployment benefits received in 2020 are exempt from tax.
State Income Tax Range: Low: 2.2% (on taxable income from $2,001 to $5,000). High:High: 6.6% (on taxable income above $60,000). Wilmington also imposes a city tax on wages.
Sales Tax: Neither the state nor localities impose a sales tax.
Property Taxes: For Delaware homeowners, the median property tax rate is $562 per $100,000 of assessed home value.
For more information, go to the Delaware State Tax Guide for Middle-Class Families.
District of Columbia
State Taxes on Unemployment Benefits: The District of Columbia (Washington, D.C.) taxes unemployment benefits to the same extent they are taxed at the federal level.
State Income Tax Range: Low: 4% (on taxable income up to $10,000). High: 8.95% (on taxable income over $1,000,000).
Sales Tax: 6% city sales tax.
Property Taxes: In the District of Columbia, the median property tax rate is $564 per $100,000 of assessed home value.
For more information, go to the District of Columbia Tax Guide for Middle-Class Families.
Florida
State Taxes on Unemployment Benefits: There are no taxes on unemployment benefits in Florida.
State Income Tax Range: There is no state income tax.
Sales Tax: 6% state levy. Localities can add as much as 2.5%, and the average combined rate is 7.08%, according to the Tax Foundation.
Property Taxes: In Florida, the median property tax rate is $830 for every $100,000 of assessed home value.
For more information, go to the Florida State Tax Guide for Middle-Class Families.
Georgia
State Taxes on Unemployment Benefits: Georgia taxes unemployment benefits.
The state has not adopted the federal exemption for up to $10,200 of unemployment compensation received in 2020. Any unemployment income that was excluded on a taxpayer's federal return should be added back on Georgia Form 500, Schedule 1, Line 5.
State Income Tax Range: Low: 1% (on the first $1,000 of taxable net income for married couples filing jointly; on the first $750 for individual filers; and on the first $500 for married couples filing separately). High: 5.75% (on the first $1,000 of taxable net income for married couples filing jointly; on the first $750 for individual filers; and on the first $500 for married couples filing separately).
Sales Tax: 4% state levy. Localities can add as much as 4.9%, and the average combined rate is 7.32%, according to the Tax Foundation.
Property Taxes: Georgia's median property tax rate is $875 per $100,000 of assessed home value.
For more information, go to the Georgia State Tax Guide for Middle-Class Families.
Hawaii
State Taxes on Unemployment Benefits: Unemployment compensation is fully taxed in Hawaii.
The Hawaii Department of Taxation is unable to provide any definitive guidance on adopting the federal exemption of the first $10,200 of unemployment compensation received in 2020 until the state legislature passes any related legislation.
State Income Tax Range: Low: 1.4% (on taxable income up to $4,800 for married couples filing jointly; on up to $2,400 for married couples filing separately and individual filers). High: 11% (on taxable income over $400,000 for married couples filing jointly and surviving spouses; on over $200,000 for married couples filing separately and individual filers).
Sales Tax: 4% state levy. Localities can add as much as 0.5%, but the average combined rate is only 4.44%, according to the Tax Foundation.
Property Taxes: The median property tax rate in Hawaii is $280 per $100,000 of assessed home value.
For more information, go to the Hawaii State Tax Guide for Middle-Class Families.
Idaho
State Taxes on Unemployment Benefits: Idaho typically taxes unemployment benefits to the same extent as they are taxed at the federal level. However, any 2020 unemployment benefits excluded for federal tax purposes on Form 1040, Schedule 1, line 8, should be added back to your Idaho income tax return. If you're filing Idaho Form 40, report the excluded income on Form 39R, Part A, line 6, "Other Additions." If you're filing Idaho Form 43, don't include the federal unemployment compensation exclusion on line 19, "Other Income." Instead, report it on Form 39NR, Part A, line 4, Column A, "Other Additions."
State Income Tax Range: Low: 1.125% (on taxable income up to $3,136 for married joint filers and up to $1,568 for individual filers). High: 6.925% (on taxable income of $23,520 or more for married joint filers and $11,760 or more for individual filers).
Sales Tax: 6% state levy. Localities (typically resort communities) can add as much as 3%, but the average combined rate is just 6.03%, according to the Tax Foundation.
Property Taxes: In Idaho, the median property tax rate is $633 per $100,000 of assessed home value.
For more information, go to the Idaho State Tax Guide for Middle-Class Families.
Illinois
State Taxes on Unemployment Benefits: Illinois generally fully taxes unemployment compensation. However, the state has adopted the the $10,200 federal tax exemption for 2020 unemployment benefits. If you filed your 2020 Illinois tax return electronically before March 15, 2021, you do not need to do anything. The Illinois Department of Revenue is planning to automatically update your adjusted gross income (AGI) and send any refunds necessary. If you filed your return by paper or filed electronically after March 14, 2021, and did not report the unemployment exclusion on your federal return, you will need to file an amended return using Form IL-1040-X and include a pro-forma federal Form 1040 and Schedule 1 showing the re-computation of your AGI. Write "Unemployment Exclusion" at the top of Form IL-1040-X.
State Income Tax Range: There is a flat rate of 4.95% of federal adjusted gross income after modifications and personal exemptions.
Sales Tax: 6.25% state levy. Localities can add as much as 4.75%, and the average combined rate is 8.82%, according to the Tax Foundation.
Property Taxes: In Illinois, the median property tax rate is $2,165 per $100,000 of assessed home value.
For more information, go to the Illinois State Tax Guide for Middle-Class Families.
Indiana
State Taxes on Unemployment Benefits: Although unemployment benefits are taxable in Indiana, part of your benefits may be deductible. The deductible amount depends on your federal adjusted gross income, how much unemployment compensation you receive, and your filing status. Complete the "Unemployment Compensation Worksheet" in the Form IT-40 instruction booklet to calculate the exact amount of your deduction.
The federal exemption for up to $10,200 of unemployment compensation received in 2020 does not currently apply in Indiana. Therefore, as of this time, an amount excluded for federal income tax purposes has to be added back when filing your Indiana income tax return. That, however, could change depending on the actions of the Indiana General Assembly during the remainder of 2021 legislative session.
State Income Tax Range: The Hoosier State has a flat rate of 3.23% of state adjusted gross income after modifications. Counties also levy income taxes.
Sales Tax: 7% state levy. No local taxes.
Property Taxes: The median property tax rate for Indiana homeowners is $810 per $100,000 of assessed home value.
For more information, go to the Indiana State Tax Guide for Middle-Class Families.
Iowa
State Taxes on Unemployment Benefits: Unemployment benefits are generally fully taxable in Iowa. However, the state adopts the federal $10,200 exemption for unemployment compensation received in 2020. The Iowa Department of Revenue will make automatic adjustments for people who already filed a 2020 Iowa income tax return. As a result, taxpayers won't need to file an amended Iowa tax return if their only adjustment pertains to unemployment compensation. People filing an original 2020 Iowa tax return should report the unemployment compensation exclusion amount on Form IA 1040, Line 14, using a code of M.
State Income Tax Range: Low: 0.33% (on up to $1,666 of taxable income). High: 8.53% (on taxable income over $74,970). Iowa also has local income surtaxes used for schools and emergency services.
Sales Tax: 6% state levy. Localities can add as much as 1%, and the average combined rate is 6.94%, according to the Tax Foundation.
Property Taxes: Iowa's median property tax rate is $1,529 per $100,000 of assessed home value.
For more information, go to the Iowa State Tax Guide for Middle-Class Families.
Kansas
State Taxes on Unemployment Benefits: Kansas taxes unemployment benefits to the same extent they're taxed under federal law.
State Income Tax Range: Low: 3.1% (on taxable income from $2,501 to $15,000 for single filers and from $5,001 to $30,000 for joint filers). High: 5.7% (on more than $30,000 of taxable income for single filers and more than $60,000 for joint filers). Kansas also has an "intangibles tax" levied on unearned income by some localities.
Sales Tax: 6.5% state levy. Localities can add as much as 4%, and the average combined rate is 8.69%, according to the Tax Foundation.
Property Taxes: In Kansas, the median property tax rate for homeowners is $1,369 for every $100,000 of assessed home value.
For more information, go to the Kansas State Tax Guide for Middle-Class Families.
Kentucky
State Taxes on Unemployment Benefits: Unemployment compensation is fully taxable in Kentucky.
The state has not adopted the federal exemption for up to $10,200 of unemployment compensation received in 2020. Any unemployment compensation excluded on a Kentucky resident's federal income tax return must be added back on his or her Kentucky individual income tax return on Schedule M, Line 5, as an "Other Addition."
State Income Tax Range: Kentucky has a flat income tax rate of 5%. Certain counties, cities and other local government entities (such as school boards) can levy an additional occupational license payroll tax on wages earned by employees working within their boundaries.
Sales Tax: State levy of 6%. There are no local sales taxes in Kentucky.
Property Taxes: The median property tax rate in Kentucky is $829 per $100,000 of assessed home value.
For more information, go to the Kentucky State Tax Guide for Middle-Class Families.
Louisiana
State Taxes on Unemployment Benefits: Louisiana taxes unemployment benefits to the same extent as they are taxed under federal law. As a result, the federal $10,200 exemption for unemployment compensation received in 2020 also applies for Louisiana income tax purposes. If you already filed your 2020 Louisiana tax return without claiming the exemption, you should file an amended state return and reduce "Line 7, Federal Adjusted Gross Income" (or Schedule E, Line 1, if used) by the exemption amount allowed on your federal return.
State Income Tax Range: Low: 2% (on $12,500 or less of taxable income for individuals, $25,000 for joint filers). High: 6% (on more than $50,000 of taxable income; $100,000 for joint filers)
Sales Tax: 4.45% state levy. Localities can add as much as 7%, and the average combined rate is 9.52%, according to the Tax Foundation.
Property Taxes: Louisiana's median property tax rate is $534 per $100,000 of assessed home value.
For more information, go to the Louisiana State Tax Guide for Middle-Class Families.
Maine
State Taxes on Unemployment Benefits: Unemployment benefits are usually fully taxable in Maine. However, to the extent its included in federal adjusted gross income (AGI), up to $10,200 of unemployment compensation received in 2020 is not taxed by Maine for people with a federal AGI less than $150,000 (for joint filers, up to $10,200 per spouse is exempt from state tax). If you filed your 2020 Maine personal income tax return before the exemption was available, you should file an amended state tax return to claim the exemption.
State Income Tax Range: Low: 5.8% (on taxable income less than $22,200 for single filers; less than $44,450 for joint filers). High: 7.15% (on taxable income of $52,600 or more for single filers; $105,200 for joint filers). For 2021, the 5.8% rate applies to taxable income less than $22,450 for single filers and less than $44,950 for joint filers. The 7.15% rate applies to taxable income over $53,150 for single filers and over $106,350 for joint filers.
Sales Tax: 5.5% state levy. No local taxes.
Property Taxes: In Maine, the median property tax rate is $1,295 for every $100,000 of assessed home value.
For more information, go to the Maine State Tax Guide for Middle-Class Families.
Maryland
State Taxes on Unemployment Benefits: Maryland generally taxes unemployment benefits to the same extent they are taxed at the federal level. However, under state law, unemployment compensation received in 2020 or 2021 is not taxed by the state for people with a federal adjusted gross income of $75,000 or less ($100,000 or less for married couples filing a joint return and head-of-household filers).
State Income Tax Range: Low: 2% (on less than $1,000 of taxable income). High: 5.75% (on more than $250,000 of taxable income for single filers; more than $300,000 for joint filers). Maryland counties and Baltimore City levy additional income taxes.
Sales Tax: State levy of 6%. There are no local sales taxes in Maryland.
Property Taxes: In Maryland, the median property tax rate for homeowners is $1,057 per $100,000 of assessed home value.
For more information, go to the Maryland State Tax Guide for Middle-Class Families.
Massachusetts
State Taxes on Unemployment Benefits: Massachusetts generally taxes unemployment benefits. However, for the 2020 and 2021 tax years, up to $10,200 of unemployment compensation that's included in a taxpayer's federal adjusted gross income is exempt for Massachusetts tax purposes if the taxpayer’s household income is not more than 200% of the federal poverty level. Up to $10,200 can be claimed by each eligible spouse on a joint return for unemployment compensation received by that spouse.
Taxpayers who already filed their 2020 Massachusetts tax return and reported unemployment compensation as income should not file an amended return at this time. The state expects to send notices to taxpayers who reported unemployment to explain whether they may be eligible for relief. If a taxpayer is eligible for a refund, the state will issue a refund and the taxpayer need not take any action. However, if a taxpayer has unpaid tax or another specific governmental liability, the state will first apply any overpayment toward those liabilities.
State Income Tax Range: Massachusetts has a flat rate of 5% for most classes of taxable income.
Sales Tax: State levy of 6.25%. There are no local sales taxes in Massachusetts.
Property Taxes: The Massachusetts median property tax rate is $1,170 for every $100,000 of assessed home value.
For more information, go to the Massachusetts State Tax Guide for Middle-Class Families.
Michigan
State Taxes on Unemployment Benefits: Unemployment compensation is generally subject to tax in Michigan. However, the $10,200 federal exemption for unemployment compensation received in 2020 also applies for Michigan income tax purposes. Nevertheless, people who collected unemployment benefits last year and have already filed their 2020 Michigan tax return should not file an amended return at this point. The Michigan Department of Treasury is waiting on further guidance from the IRS with respect to potential data sharing that may allow the state to expedite Michigan income tax refunds to Michigan taxpayers without the need for amended returns. Also note that interest and penalties for failure to pay Michigan estimated tax on unemployment benefits received in 2020 are waived.
State Income Tax Range: Michigan has a flat tax rate of 4.25%. Cities can levy income taxes as well, on both residents and non-residents (who are taxed 1/2 the rate of residents).
Sales Tax: State levy of 6%. There are no local sales taxes in Michigan.
Property Taxes: In Michigan, the median property tax rate is $1,448 per $100,000 of assessed home value.
For more information, go to the Michigan State Tax Guide for Middle-Class Families.
Minnesota
State Taxes on Unemployment Benefits: Minnesota taxes unemployment benefits. The state has not adopted the federal exclusion for up to $10,200 of unemployment compensation received in 2020. If you excluded any unemployment compensation on your federal return, you must add it back on your Minnesota return by reporting the federally excluded amount on Line 7 of Schedule M1NC and including the amount in your total unemployment compensation on Line C of Form M1.
State Income Tax Range: Low: 5.35% (on less than $26,960 of taxable income for single filers and on less than $39,410 for joint filers). High: 9.85% (on more than $164,400 of taxable income for single filers and on more than $273,470 for joint filers). For 2021, the 5.35% rate applies to taxable income less than $27,230 for single filers and less than $39,810 for joint filers. The 9.85% rate applies to taxable income over $166,040 for single filers and over $276,200 for joint filers.
Sales Tax: 6.875% state levy. Localities can add as much as 2%, with an average combined rate of 7.46%, according to the Tax Foundation.
Property Taxes: The Minnesota median property tax rate is $1,082 per $100,000 of assessed home value.
For more information, go to the Minnesota State Tax Guide for Middle-Class Families.
Mississippi
State Taxes on Unemployment Benefits: Mississippi residents are fully taxed on their unemployment compensation. The state has not adopted the federal exemption for unemployment compensation received in 2020.
State Income Tax Range: Low: 3% (on taxable income from $3,001 to $5,000). High: 5% (on taxable income over $10,000).
Sales Tax: 7% state levy. Only two localities, Jackson (1%) and Tupelo (0.25%) add to that. According to the Tax Foundation, that makes for an average combined rate of 7.07%.
Property Taxes: The median property tax rate for Mississippi homeowners is $787 per $100,000 of assessed home value.
For more information, go to the Mississippi State Tax Guide for Middle-Class Families.
Missouri
State Taxes on Unemployment Benefits: Unemployment compensation is generally taxed in Missouri to the same extent it's taxed under federal law. As a result, the state has adopted the federal exemption for up to $10,200 of unemployment compensation received in 2020. If you previously filed a 2020 Missouri tax return and reported unemployment income that is now excluded from your federal adjusted gross income, you must file an amended Missouri return to claim the exemption for state tax purposes.
State Income Tax Range: Low: 1.5% (on taxable income of $107 or more). High: 5.4% (on more than $8,584 of taxable income). Kansas City and St. Louis also impose an earnings tax.
Sales Tax: 4.225% state levy. Localities can add as much as 5.763%, and the average combined rate is 8.25%, according to the Tax Foundation.
Property Taxes: For Missouri residents, the median property tax rate is $930 per $100,000 of assessed home value.
For more information, go to the Missouri State Tax Guide for Middle-Class Families.
Montana
State Taxes on Unemployment Benefits: Montana does not tax unemployment benefits.
Taxpayers who filed a Montana tax return on or before March 12, 2021, should not amend the state return to report the federal exclusion of up to $10,200 in unemployment compensation received in 2020 if it was already excluded on the return. Taxpayers filing after March 12, 2021, should follow the instructions for Schedule 1, Line 8; Additions Schedule, Line 14; and Subtractions Schedule, Line 7, to exclude all unemployment compensation from Montana income tax.
State Income Tax Range: Low: 1% (on up to $3,100 of taxable income). High: 6.9% (on taxable income over $18,700).
Sales Tax: No state sales tax. Resort areas such as Big Sky, Red Lodge and West Yellowstone have local sales taxes.
Property Taxes: For homeowners in Montana, the median property tax rate is $831 for every $100,000 of assessed home value.
For more information, go to the Montana State Tax Guide for Middle-Class Families.
Nebraska
State Taxes on Unemployment Benefits: Unemployment benefits are taxed in Nebraska to the same extent they are taxed under federal law. As a result, the state follows the federal exemption for up to $10,200 of unemployment compensation received in 2020. At this time, the Nebraska Department of Revenue asks taxpayers not to file amended Nebraska tax returns until it determines the appropriate processes for correcting these returns in every situation.
State Income Tax Range: Low: 2.46% (on up to $3,290 of taxable income for single filers and $6,570 for married couples filing jointly). High: 6.84% (on taxable income over $31,750 for single filers and $63,500 for married couples filing jointly).
Sales Tax: 5.5% state levy. Localities can add as much as 2.5%, and the average combined rate is 6.94%, according to the Tax Foundation.
Property Taxes: In Nebraska, the median property tax rate for homeowners is $1,614 per $100,000 of assessed home value.
For more information, go to the Nebraska State Tax Guide for Middle-Class Families.
Nevada
State Taxes on Unemployment Benefits: There are no taxes on unemployment benefits in Nevada.
State Income Tax Range: There is no state income tax.
Sales Tax: 6.85% state levy. Localities can add as much as 1.53%, and the average combined rate is 8.23%, according to the Tax Foundation.
Property Taxes: Nevada's median property tax rate is $533 per $100,000 of assessed home value.
For more information, go to the Nevada State Tax Guide for Middle-Class Families.
New Hampshire
State Taxes on Unemployment Benefits: There are no taxes in New Hampshire on unemployment benefits.
State Income Tax Range: New Hampshire doesn't have an income tax. But there's a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers).
Sales Tax: No sales tax.
Property Taxes: The median property tax rate in New Hampshire is $2,050 for every $100,000 of assessed home value.
For more information, go to the New Hampshire State Tax Guide for Middle-Class Families.
New Jersey
State Taxes on Unemployment Benefits: New Jersey does not tax unemployment compensation.
State Income Tax Range: Low: 1.4% (on up to $20,000 of taxable income). High: 10.75% (on taxable income over $1 million). Newark also imposes a payroll tax.
Sales Tax: 6.625% state levy. That rate is cut in half (3.3125%) for in-person sales in designated Urban Enterprise Zones located in disadvantaged areas. Salem County, which borders no-tax Delaware, also charges the reduced 3.3125% rate.
Property Taxes: In New Jersey, the median property tax rate is $2,417 per $100,000 of assessed home value.
For more information, go to the New Jersey State Tax Guide for Middle-Class Families.
New Mexico
State Taxes on Unemployment Benefits: Unemployment benefits are taxed in New Mexico to the same extent they are taxed under federal law. As a result, any unemployment compensation received in 2020 (up to $10,200) exempt from federal income tax is also exempt from New Mexico income tax. Taxpayers who filed their 2020 New Mexico income tax return before claiming the unemployment compensation exemption may wish to amend their state return.
State Income Tax Range: Low: 1.7% (on up to $5,500 of taxable income for single filers and $8,000 for joint filers). High: 4.9% (on taxable income over $16,000 for single filers and over $24,000 for married couples filing jointly). Beginning with the 2021 tax year, the top rate will be 5.9% on taxable income over $210,000 for single filers and over $315,000 for joint filers.
Sales Tax: 5.125% state levy. Localities can add as much as 4.313%, and the average combined rate is 7.83%, according to the Tax Foundation. New Mexico's tax is a gross receipts tax that covers most services.
Property Taxes: In New Mexico, the median property tax rate is $776 for every $100,000 of assessed home value.
For more information, go to the New Mexico State Tax Guide for Middle-Class Families.
New York
State Taxes on Unemployment Benefits: New York generally taxes unemployment compensation to the same extent it is taxed under federal law. However, the state does not follow federal changes made after March 1, 2020. As a result, New York has not adopted the federal exemption for up to $10,200 of unemployment compensation received in 2020. If you have not yet filed your 2020 New York tax return, you must add back any federal unemployment compensation excluded on your federal return. If you already filed your 2020 New York return, and you didn't add back unemployment compensation that was excluded from your federal gross income, then you must file an amended New York return. If you didn't exclude unemployment compensation from your federal gross income, don't file an amended return.
State Income Tax Range: Low: 4% (on up to $8,500 of taxable income for single filers and up to $17,150 for married couples filing jointly). High: 8.82% (on taxable income over $1,070,550 for single filers and over $2,155,350 for married couples filing jointly). New York City and Yonkers impose their own income tax. A commuter tax is also imposed on residents of New York City, as well as on residents of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester Counties.
Sales Tax: 4% state levy. Localities can add as much as 4.875%, and the average combined rate is 8.52%, according to the Tax Foundation. In the New York City metro area, there is an additional 0.375% sales tax to support transit.
Property Taxes: New York's median property tax rate is $1,692 per $100,000 of assessed home value.
For more information, go to the New York State Tax Guide for Middle-Class Families.
North Carolina
State Taxes on Unemployment Benefits: Unemployment benefits are taxed in North Carolina.
So far, North Carolina has not adopted the federal exemption for up to $10,200 of unemployment compensation received in 2020. North Carolina generally follows federal tax law as it existed on May 1, 2020. As a result, unless the state updates its law to follow the federal tax code as of March 11, 2021, or later, the $10,200 exemption for unemployment compensation does not apply when calculating North Carolina taxable income for the 2020 tax year.
State Income Tax Range: North Carolina has a flat tax rate of 5.25%.
Sales Tax: 4.75% state levy. Localities can add as much as 2.75%, and the average combined rate is 6.98%, according to the Tax Foundation.
Property Taxes: The median property tax rate in North Carolina is $773 per $100,000 of assessed home value.
For more information, go to the North Carolina State Tax Guide for Middle-Class Families.
North Dakota
State Taxes on Unemployment Benefits: North Dakota taxes unemployment benefits to the same extent it is taxed under federal law. As a result, any unemployment compensation received in 2020 (up to $10,200) exempt from federal income tax is not subject North Dakota income tax. For full-year North Dakota residents who filed a state tax return that was filed or postmarked before April 1, 2021, the state will recalculate the return and issue any refund stemming from the federal exemption. Nonresidents and part-year residents will need to amend their state tax return if North Dakota taxable income is affected.
State Income Tax Range: Low: 1.1% (on up to $40,125 of taxable income for singles and up to $67,050 for married couples filing jointly). High: 2.9% (on taxable income over $440,600).
Sales Tax: 5% state levy. Localities can add as much as 3.5%, and the average combined rate is 6.96%, according to the Tax Foundation.
Property Taxes: North Dakota's median property tax rate is $986 per $100,000 of assessed home value.
For more information, go to the North Dakota State Tax Guide for Middle-Class Families.
Ohio
State Taxes on Unemployment Benefits: Ohio taxes unemployment compensation to the same extent it is taxed under federal law. As a result, any unemployment compensation received in 2020 (up to $10,200) exempt from federal income tax is not subject Ohio income tax. Taxpayers who previously filed their federal and Ohio returns prior to the enactment of the federal exemption and are waiting for the IRS to issue a refund don't need to take any additional action on their originally filed Ohio return at this time. The state will provide further guidance when more details are available from the IRS.
State Income Tax Range: Low: 2.85% (on taxable income from $22,150 to $44,250). High: High: 4.797% (on taxable income over $221,300). Cities and school districts in Ohio can also impose local income taxes.
Sales Tax: 5.75% state levy. Localities can add as much as 2.25%, and the average combined rate is 7.23%, according to the Tax Foundation.
Property Taxes: The Ohio median property tax rate is $1,478 per $100,000 of assessed home value.
For more information, go to the Ohio State Tax Guide for Middle-Class Families.
Oklahoma
State Taxes on Unemployment Benefits: Oklahoma taxes unemployment benefits to the same extent they are taxed on your federal return. The Oklahoma Tax Commission will release guidance on the state tax treatment of the federal exemption for up to $10,200 of unemployment compensation received in 2020 after the IRS releases additional details regarding the exemption.
State Income Tax Range: Low: 0.5% (on up to $1,000 of taxable income for single filers and up to $2,000 for married joint filers). High: 5% (on taxable income over $7,200 for single filers and over $12,200 for married joint filers).
Sales Tax: 4.5% state levy. Localities can add as much as 7%, and the average combined rate is 8.95%, according to the Tax Foundation.
Property Taxes: In Oklahoma, the median property tax rate is $869 per $100,000 of assessed home value.
For more information, go to the Oklahoma State Tax Guide for Middle-Class Families.
Oregon
State Taxes on Unemployment Benefits: Oregon generally taxes unemployment benefits received during the year. However, the state does not tax unemployment benefits received as a result of work performed in any federally recognized Indian reservation in Oregon or other land in the state that has been set aside as the home of tribal Indians under federal protection.
Oregon follows the $10,200 federal exemption for unemployment benefits received in 2020. The Oregon Department of Revenue will automatically adjust the returns for eligible taxpayers who already filed their 2020 Oregon tax return.
State Income Tax Range: Low: 4.75% (on up to $3,600 of taxable income for single filers and up to $7,200 for married couples filing jointly). High: 9.9% (on taxable income over $125,000 for single filers and over $250,000 for married couples filing jointly). A "kicker" tax credit may be available on Oregon tax returns for odd-numbered years. The credit is authorized if actual state revenues exceed forecasted revenues by 2% or more over the two-year budget cycle. Counties and special districts can also impose local income taxes.
Sales Tax: No state or local sales tax.
Property Taxes: The median property tax rate for Oregon homeowners is $903 per $100,000 of assessed home value.
For more information, go to the Oregon State Tax Guide for Middle-Class Families.
Pennsylvania
State Taxes on Unemployment Benefits: Unemployment compensation is not taxable for Pennsylvania income tax purposes.
State Income Tax Range: Pennsylvania has a flat rate of 3.07%. Municipalities and school districts can also impose taxes on wages or income.
Sales Tax: 6% state levy. Philadelphia has a local sales tax of an additional 2%, and Allegheny County (Pittsburgh's home county) adds a local sales tax of 1%. The combined average state and local rate is 6.34%, according to the Tax Foundation.
Property Taxes: In Pennsylvania, the median property tax rate is $1,499 for every $100,000 of assessed home value.
For more information, go to the Pennsylvania State Tax Guide for Middle-Class Families.
Rhode Island
State Taxes on Unemployment Benefits: Rhode Island taxes unemployment taxes.
The state does not adopt the federal $10,200 exemption for unemployment compensation received in 2020. If you already filed your 2020 Rhode Island income tax return and did not include all your 2020 unemployment benefits as income, you must file an amended Rhode Island return and include in your income the full amount of your 2020 unemployment benefits.
State Income Tax Range: Low: 3.75% (on up to $65,250 of taxable income). High: 5.99% (on taxable income over $148,350).
Sales Tax: 7% state levy. No general local sales taxes.
Property Taxes: For homeowners in Rhode Island, the median property tax rate is $1,533 per $100,000 of assessed home value.
For more information, go to the Rhode Island State Tax Guide for Middle-Class Families.
South Carolina
State Taxes on Unemployment Benefits: Unemployment compensation is generally taxable in South Carolina to the same extent it's taxed under federal law. However, the state has not adopted the federal exemption for up to $10,200 of unemployment compensation received in 2020. The South Carolina General Assembly is considering legislation that could adopt the exemption, so the situation could change at a later date.
State Income Tax Range: Low: 3% (on taxable income from $3,070 to $6,150). High: 7% (on taxable income over $15,400).
Sales Tax: 6% state levy. Localities can add as much as 3%, and the average combined rate is 7.46%, according to the Tax Foundation.
Property Taxes: South Carolina's median property tax rate is $545 per $100,000 of assessed home value.
For more information, go to the South Carolina State Tax Guide for Middle-Class Families.
South Dakota
State Taxes on Unemployment Benefits: South Dakota does not tax unemployment benefits.
State Income Tax Range: There's no state income tax.
Sales Tax: 4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.4%, according to the Tax Foundation.
Property Taxes: The median property tax rate in South Dakota is $1,219 per $100,000 of assessed home value.
For more information, go to the South Dakota State Tax Guide for Middle-Class Families.
Tennessee
State Taxes on Unemployment Benefits: There is no tax on unemployment benefits in Tennessee.
State Income Tax Range: Tennessee has no state income tax. (In 2020, dividends and some interest were subject to the Hall Tax at a 1% rate.)
Sales Tax: 7% state levy. There's also an additional state tax of 2.75% on sales of single items that applies to the portion of the sales price from $1,600 to $3,200. Localities can add up to 2.75%, with an average combined state and local rate of 9.55%, according to the Tax Foundation. Local taxes are limited, though: Only the first $1,600 of any single item is taxable.
Property Taxes: The median property tax rate for Tennessee homeowners is $636 per $100,000 of assessed home value.
For more information, go to the Tennessee State Tax Guide for Middle-Class Families.
Texas
State Taxes on Unemployment Benefits: Texas does not tax unemployment benefits.
State Income Tax Range: Texas has no state income tax.
Sales Tax: 6.25% state levy. Localities can add up to 2%, with an average combined rate of 8.19%, according to the Tax Foundation.
Property Taxes: The median property tax rate in Texas is $1,692 per $100,000 of assessed home value.
For more information, go to the Texas State Tax Guide for Middle-Class Families.
Utah
State Taxes on Unemployment Benefits: Utah taxes unemployment benefits to the same extent they are taxed for federal income tax purposes.
State Income Tax Range: Utah has a flat tax of 4.95%.
Sales Tax: State levy is 4.85%, but mandatory 1% local sales tax and 0.25% county option sales tax are added to the state tax (for a 6.1% total rate). Plus, localities can add up to an additional 2.95%, making the average combined state and local rate 7.19%, according to the Tax Foundation.
Property Taxes: In Utah, the median property tax rate is $575 per $100,000 of assessed home value.
For more information, go to the Utah State Tax Guide for Middle-Class Families.
Vermont
State Taxes on Unemployment Benefits: Unemployment compensation is taxed in Vermont.
The federal exclusion of 2020 unemployment benefits does not automatically apply to Vermont state income taxes. If Vermont ultimately adopts the exclusion, taxpayers who filed a Vermont tax return after March 15, 2021, and took the exclusion at the federal level won't need to take any further action. If Vermont does not adopt the new federal exclusion, the state will issue further guidance to taxpayers who already filed their Vermont tax return. At a minimum, the state will offer a grace period to have corrections made to Vermont state income tax returns without penalty or interest related to this change. If you already filed a Vermont state tax return for 2020, you should not amend your return at this time to take advantage of the exclusion.
State Income Tax Range: Low: 3.35% (on up to $40,350 of taxable income for singles and up to $67,450 for joint filers). High: 8.75% (on taxable income over for $204,000 for singles and up to $248,350 for joint filers).
Sales Tax: 6% state levy. Municipalities can add 1% to that, but the average combined state and local rate is 6.24%, according to the Tax Foundation.
Property Taxes: Vermont's median property tax rate is $1,861 per $100,000 of assessed home value.
For more information, go to the Vermont State Tax Guide for Middle-Class Families.
Virginia
State Taxes on Unemployment Benefits: There are no taxes on unemployment benefits in Virginia.
State Income Tax Range: Low: 2% (on up to $3,000 of taxable income). High: 5.75% (on taxable income over $17,000).
Sales Tax: 5.3% state levy, including 1% that is allocated to local governments. Northern Virginia, Central Virginia, and the Hampton Roads area have an additional 0.7% sales tax to pay for transportation improvements. An additional 1% tax is levied in Halifax and Henry Counties (effective April 1, 2021), and an extra 1.7% tax is levied in the "Historic Triangle" area. These additional taxes give the state an average combined state and local rate of 5.73%, according to the Tax Foundation.
Property Taxes: In Virginia, the median property tax rate is $804 per $100,000 of assessed home value.
For more information, go to the Virginia State Tax Guide for Middle-Class Families.
Washington
State Taxes on Unemployment Benefits: Washington does not tax unemployment benefits.
State Income Tax Range: Washington has no state income tax.
Sales Tax: 6.5% state levy. Municipalities can add up to 4% to that, with the average combined rate at 9.23%, according to the Tax Foundation.
Property Taxes: The Washington median property tax rate is $929 for every $100,000 of assessed home value.
For more information, go to the Washington State Tax Guide for Middle-Class Families.
West Virginia
State Taxes on Unemployment Benefits: Unemployment compensation is generally subject to tax in West Virginia to the same extent it's taxed at the federal level. However, the state currently does not adopt the federal exemption for up to $10,200 of unemployment compensation received in 2020. There is a bill in the state legislature that would adopt the exemption, so the situation may change later.
State Income Tax Range: Low: 3% (on up to $10,000 of taxable income). High: 6.5% (on taxable income of $60,000 or more). West Virginia municipalities can also impose city service fees on people working in the city.
Sales Tax: 6% state levy. Municipalities can add up to 1% to that, with an average combined rate of 6.5%, according to the Tax Foundation.
Property Taxes: In West Virginia, the median property tax rate for homeowners is $571 for every $100,000 of assessed home value.
For more information, go to the West Virginia State Tax Guide for Middle-Class Families.
Wisconsin
State Taxes on Unemployment Benefits: Wisconsin generally taxes unemployment benefits. However, a portion of your benefits may be exempt from tax. Complete the "Unemployment Compensation Worksheet" in the Schedule SB instructions to see if you can exclude any portion of your unemployment benefits from Wisconsin income taxes.
The federal income tax exclusion of up to $10,200 of unemployment compensation received in 2020 doesn't apply for Wisconsin tax purposes. Therefore, if you already filed your 2020 Wisconsin income tax return and are amending your federal return solely to exclude unemployment compensation, don't amend your 2020 Wisconsin return because there is no change to the amount of taxable income or tax due to Wisconsin. If you haven't filed your 2020 Wisconsin return, you must add the amount of unemployment compensation excluded on your federal return on Lines 2h, 2i, or 2j of Wisconsin Schedule I.
State Income Tax Range: Low: 3.54% (on up to $11,450 of taxable income for singles or up to $15,960 for married couples). High: 7.65% (on taxable income over $263,480 for singles or over $351,310 for married couples).
Sales Tax: 5% state levy. Municipalities can add up to 1.75% to that, with the average combined rate at 5.43%, according to the Tax Foundation.
Property Taxes: Wisconsin's median property tax rate is $1,684 per $100,000 of assessed home value.
For more information, go to the Wisconsin State Tax Guide for Middle-Class Families.
Wyoming
State Taxes on Unemployment Benefits: There are no taxes on unemployment benefits in Wyoming.
State Income Tax Range: Wyoming has no state income tax.
Sales Tax: 4% state levy. Municipalities can add up to 2% to that, with a combined rate of 5.33%, according to the Tax Foundation.
Property Taxes: In Wyoming, the median property tax rate is $575 per $100,000 of assessed home value.
For more information, go to the Wyoming State Tax Guide for Middle-Class Families.
