Did You Know That Unemployment Compensation is Taxable?

Millions of Americans received unemployment compensation in 2020. These are taxable benefits and withholding is voluntary. However, if taxes were not withheld, they may be owed on 2020 returns.

By law, unemployment compensation is taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted last spring.

Please click here to learn more about this taxable unemployment compensation.

Source: Internal Revenue Service