Getting laid off and having to file for unemployment benefits can be a scary and confusing time. Most people don’t know much about the unemployment system until they are forced to learn first-hand. Broussard Poché, LLP knows that accurate information about the taxes and unemployment benefits is a bit hard to come by. Let’s walk you through it.
Yes, unemployment benefits are taxed
Unemployment benefits are counted as income and are taxable on your federal tax return. There is one exception, you may not need to file a federal tax return if your gross income does not meet the federal income limit of $10,300 ($20,600 if married filing jointly) in 2016.
If you received unemployment benefits you will get a Form 1099 – G. This form details the amount of income you have received from the government, as well as any taxes withheld from the benefits.
Will I get a tax refund?
If you request unemployment benefits, you do have the option to have taxes withheld, and if the withholding is more than your overall liability, you may get a refund. You may also be eligible for tax deductions and credits depending on your income and the duration of your unemployment.
It’s natural to have questions when facing an uncertain time in your employment, Broussard Poché, LLP has experts that can help get through the rough patch.