You can choose to have income tax withheld from unemployment compensation.
Unemployment compensation is taxable.
So, if you do not have income tax withheld, you may have to make estimated tax payments. See chapter 2 . If you do not pay enough tax either through withholding or estimated tax, you may have to pay a penalty. See chapter 4 . If income tax is withheld from your unemployment compensation, you will receive a Form 1099-G, Certain Government and Qualified State Tuition Program Payments.