Unemployment benefits have only recently been exempt from the federal government taxations. However, within 2008 they were still taxable. You will be able to receive a tax refund if you have the correct files and forms, although it may be easier to have someone do these for you to ensure that you are refunded the full amounts. As tax can be difficult to understand, if you have collected unemployment in 2008, it will benefit you to research and find out about how and why the federal government has taxed your unemployment so you don’t feel like you have been cheated out of any money.
There are many arguments surrounding the reasons why collected unemployment shouldn’t be taxed. Firstly, people argue that the unemployment support you receive is near the poverty line of income, making it already difficult for you to sustain yourself and pay bills. However, the other side of this argument is simple: Those who are capable of work should be looking for a job while they are collecting unemployment. If the income from the benefit is good, you will not feel pressured to immediately find work as you can survive comfortably, and this is commonly known in economics as the ‘unemployment trap’.
As there as always been disagreements on the subject, there has no been a movement to try and avoid further conflicts. For benefits after the tax year of 2009, collected unemployment will now not be taxed for around the first $2,000 that you will receive, this is to ensure that you can live and pay bills, but to also encourage you to find your own source of income once you will begin to be taxed.
There are many arguments surrounding the reasons why collected unemployment shouldn’t be taxed. Firstly, people argue that the unemployment support you receive is near the poverty line of income, making it already difficult for you to sustain yourself and pay bills. However, the other side of this argument is simple: Those who are capable of work should be looking for a job while they are collecting unemployment. If the income from the benefit is good, you will not feel pressured to immediately find work as you can survive comfortably, and this is commonly known in economics as the ‘unemployment trap’.
As there as always been disagreements on the subject, there has no been a movement to try and avoid further conflicts. For benefits after the tax year of 2009, collected unemployment will now not be taxed for around the first $2,000 that you will receive, this is to ensure that you can live and pay bills, but to also encourage you to find your own source of income once you will begin to be taxed.
