Question

Why did my return amount go down so much when I entered my 1099 for unemployment? And I had taxes withheld.

Forum|Forum|5 years ago
February 15, 2021
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TurboTax Free Edition Online

When you add your 1099G unemployment compensation, your taxable income increases. When you add more income, your tax liability increases, so you see your refund decrease. The 1099-G income is taxed at whatever tax rate you are in which can be higher than the % of taxes withheld on that form.

Also the Unemployment compensation can affect the amount of Earned Income Credit that you might qualify for. Unemployment Compensation doesn't count as "Earned Income" but it does come into the calculation of the EIC, in a negative way.

EITC Worksheet

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