Unemployed? Know your filing requirements

Image by David Reber
Image by David Reber

Are You Collecting an Unemployment Check?

Here’s what you need to know:

Being unemployed can cause a lot of stress and anxiety. Don’t make your situation worse by not paying your taxes. All unemployment compensation and benefits you receive are considered taxable income and need to be reported on your tax return.

Unemployment compensation generally includes any amounts received under the unemployment compensation laws of both the federal and state governments. It includes state unemployment insurance benefits and benefits paid to you by a state from the Federal Unemployment Trust Fund. It also includes railroad unemployment compensation benefits, but not worker’s compensation.

Supplemental unemployment benefits received from a company-financed fund are not considered unemployment compensation for this purpose. Instead, these benefits are fully taxable as wages and are reported on Form W-2, Wage and Tax Statement.

Unemployment benefits from a private fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. This taxable amount is not unemployment compensation; it is reported as other income.†

If you received unemployment compensation during the year, and you’re not sure how to file your taxes, we can help! You should receive Form 1099-G, Certain Government Payments, showing the amount you were paid. Remember that any unemployment compensation that you received must be included in your income. Of course, you can voluntarily elect withholding to ease any resulting tax liability.

New York, New Jersey and Pennsylvania residents: if you have any other questions regarding this matter, remember we’re here to help you protect your assets and Grow Your Business!

†Source: NATP