Are unemployment benefits taxable in Illinois?

Yes, unemployment benefits are taxable in Illinois. According to the Illinois Department of Employment Security (IDES), unemployment benefits are considered taxable income on both federal and state levels. IDES advises individuals receiving unemployment benefits in Illinois to voluntarily elect tax withholding from their payment when they apply or complete the Form 1099-G. This withholding can help individuals avoid facing a large tax bill when they file their income tax returns. Taxable unemployment benefits should be reported on the individual's federal and state income tax returns, and IDES provides information and resources to assist individuals in understanding their tax obligations. It is recommended that individuals consult with a tax professional or visit IRS and IDES websites for further guidance on reporting unemployment benefits and tax liabilities.