Do You Qualify For Tax Free Unemployment Benefits?
Do you qualify for tax free unemployment benefits? The American Rescue Plan Act signed into law by President Biden is designed, in part, to be beneficial to you if you spent some time on unemployment in 2020. According to Syracuse.com the plan makes a certain amount of unemployment benefits tax-free.
Do you qualify? If your household adjusted gross income is under $150,000 then you are off to a good start. This is the break down of the rest. If you were single, the first $10,200 in unemployment is tax free. If you were married, filing jointly the first $20,400 (up to $10,200 for each individual) is tax free. You will have to pay tax on anything over those amounts.
In over 30 years in the workforce I found myself unemployed for a month and I have to admit it was confusing and stressful. Trying to figure out how to file, will the benefits be enough and just wishing you were working again. Then you realize you have to pay tax on these benefits. It can be overwhelming.