TaxBandits Knowledge Base

What is unemployment compensation?

Unemployment compensation, also known as unemployment insurance or unemployment benefits, is provided by federal or state agencies to individuals who have lost their jobs due to layoffs or retrenchment.

Certain conditions must be met to receive this benefit, such as having a minimum work history, registering as unemployed, and actively searching for a job.

The unemployment compensation paid to an individual must be reported by the respective federal, state, or local government in Form 1099-G.