Unemployment benefits paid under the Railroad Unemployment Insurance Act (RUIA) are considered income for Federal income tax purposes. Each year, the Railroad Retirement Board (RRB) sends railroad employees Form 1099-G showing the total amount of unemployment benefits paid during the preceding calendar year. You must report that amount on your Federal income tax return.
You may file Form W-4v with the nearest RRB office if you want the RRB to withhold Federal income tax from your benefits. To end withholding you must file another Form W-4v with the RRB. Form W-4v is available upon request from the Internal Revenue Service. The RUIA specifically exempts railroad unemployment benefits from State income taxes.