The coronavirus pandemic has hit us in many ways; no one denies that, but probably one of the most dreadful repercussions is our “thin” wallets. Many of us are unemployed right now due to COVID-19, so, unsurprisingly, many questions arose. The primary one involves the unemployment benefits, of course.
Questions like “What do I need to do to get these benefits?” “Will they impact my future income?” or “How long will I get them?” are the most likely to spring to our minds. However, the only question that really disturbs us is whether our unemployment benefits are taxed or not.
Well, in general, federal income taxes are being taxed, and the taxman also taxes your unemployment benefits as if they were your wages. Yet, it doesn’t mean that your unemployment benefits will get taxed. Depending on where you live, you might be fortunate enough to pass on the taxes paid for unemployment benefits.
Plus, some U.S. rules make some exceptions now due to the coronavirus situation, so let’s see if the state you live in is on your side or not.