More than 18,000 people are collecting unemployment benefits through Rhode Island’s unemployment insurance system.

If you’re among them, or you expect to join the ranks of the unemployed any time soon, there’s an important point you need to keep in mind:

Unemployment benefits are taxable — at both the federal and Rhode Island level.

So if you don’t take steps to tackle the tax issue now, you could wind up owing tax come the April 15 tax-filing deadline.

And if you’re out of work and collecting unemployment compensation, the last thing you want to face is a tax bill.

What to do?

You can simply have tax withheld from your unemployment benefit payments, said Bob D. Scharin, senior tax analyst from the Tax & Accounting business of Thomson Reuters.

There are other ways to deal with the issue, such as making quarterly estimated tax payments. But withholding is the most convenient method for many beneficiaries, Scharin said.

By choosing to have tax withheld, “It means you will not have to come up with a chunk of cash” during tax season to cover a balance due, he said. It could help you avoid any potential penalty for underpayment of tax, he said.

The Rhode Island Department of Labor and Training offers withholding as an option — for both federal and Rhode Island income tax.

You can choose the withholding option when you first apply for benefits, said Raymond A. Filippone, assistant director of the Department of Labor and Training who oversees unemployment insurance.

If you’re already receiving unemployment compensation, but didn’t choose the withholding option when you first filed for benefits, you still can elect withholding by filling out a special form, Filippone and agency spokeswoman Laura Hart said.

Just call the agency — at (401) 243-9100 — to have a copy of the form mailed to you. (It’s called “Application to Withhold Federal and/or State Income Tax from Unemployment Benefits.”)

Or send an e-mail to the following address:

uihelp@dlt.ri.gov

The form spells out the details. (For instance, in general, the withholding rate is 10 percent of your unemployment benefit for federal income tax, 2.5 percent for Rhode Island income tax.)

Complete the form and mail it back; withholding will begin as soon as the form can be processed.

About 75 percent of beneficiaries have income tax withheld from their benefits “in one form or another,” Filippone said in an interview at the agency’s headquarters in Cranston.

In Rhode Island, the maximum weekly unemployment benefit is $528. When additional payments for dependents are included, the weekly maximum is $660. (The average weekly benefit is about $350, Filippone said.)

There are some other tax-planning matters for the unemployed to keep in mind, too.

For example, even if you’re collecting unemployment compensation, odds are that your income for the year has dropped.

As a result, you could be eligible for certain tax breaks that you couldn’t claim before because your income exceeded certain limits, Scharin said.

These include tax credits for amounts you spend on college education, the earned income credit, and the deduction for medical expenses.

(And if you’re claiming the medical expense deduction, don’t forget to count any amounts you pay to continue health insurance coverage through your former employer under terms of the federal COBRA law, he said.)

But first deal with the bigger picture:

Your unemployment benefits are taxable. That’s nothing new; unemployment compensation has been subject to tax, in one form or another, since 1978.

But if you’re collecting unemployment benefits for the first time, the tax issue may be new to you.

By choosing to have federal and Rhode Island income-tax withheld from your unemployment benefit payments, odds are you won’t have to face an unpleasant tax bill during tax-filing season, which is right around the corner.

TODAY’S TIP: If you phone the Department of Labor and Training’s call center, keep in mind that call volume is high.

That’s partly because Rhode Island’s unemployment rate is 9.3 percent, tied with Michigan for the highest unemployment rate in the nation.

Questions about your money matters? Call us at 1-401-277-7484 and leave a message, or e-mail:

moneyline@projo.com

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