Here’s the thing, though: the federally funded weekly payments ($600 last year, $300 this) — like state UI benefits — are taxable by the IRS at a minimum.
by Dave Allen
The International Forecaster
WARNING: THE TAX MAN COMETH…even if you’re collecting unemployment benefits.
If Covid has cost you or a loved one a job, you’re one of 10.7 million people, or 6.7% of the American workforce, who were unemployed in December.
And if you received unemployment benefits (there were an estimated 74 million initial jobless claims filed from March through December 2020) — you owe federal and probably state income taxes on what you got.
Many states cap their highest unemployment insurance (UI) paymouts at half the state’s average weekly wage, while others have lower caps.
Last February, average weekly UI benefits were $387 nationwide but ranged from a low of $215 in Mississippi to $550 in Massachusetts, according to the nonpartisan Center on Budget and Policy Priorities.