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Unemployment Benefits and Taxes

As practitioners assist clients in navigating these challenging times, they should consider warning clients about the income tax effects of unemployment benefits. 

While unemployment benefits are included in gross income, many recipients do not have income taxes withheld from the benefits.  For those who elect to have withholding, the amount of withholding is often below the amount of the tax liability actually owed on the benefits.  As a result, recipients may owe a balance of tax next April and should be warned about this possibility.   

The information provided herein is provided with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional service. As such, M + O = CPE, Inc. and the author disclaim any responsibility or liability for the information supplied herein or the application of said information.