Fortunately for some Californians, the state doesn’t impose taxes on unemployment benefits. In fact, if you live in California, you don’t have to pay any income taxes. There’s a trick, though. Californians who filed a 2020 tax return before March 11 requested California earned income tax credit, and also reported unemployment benefits, don’t have to change anything on their return.
The state will basically make any changes if necessary and send the information to Uncle Sam, so you get the right refund. However, there’s another scenario. If you actually filed a 2020 California tax return, reported your unemployment incomes, as well as your federal AGI, but didn’t claim California earned income tax credit, you must check if you qualify for the credit. In case you do, use Form FTB 3514 to claim it.