With COVID-19 still wreaking havoc across the globe, the U.S. economy has been shaken. In the United States a record number of people are or were once unemployed due to COVID-related shutdowns. Fortunately, many of those individuals qualified for standard state unemployment benefits, plus the additional federal funds offered as a result of the CARES Act. If you received unemployment benefits due to job loss this year, it’s critical to understand how that money impacts your taxes. And obviously, if you are still unemployed, finding out you owe a large tax bill may be even more burdensome. Here is what you need to know about reporting your unemployment income on your tax return. Why is unemployment income taxable? Unemployment income is still income. Therefore, by law, it is taxable. According to the IRS, any unemployment income, including the additional unemployment compensation authorized under the CARES Act, must be reported on your 2020 tax return . That might seem counterintui...
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