You will have to pay taxes on unemployment benefits.
There are two kinds of taxes that people are required to pay: Federal and State. The federal government will require for you to pay taxes on this unemployment benefit money that you have received. You will receive a 1099 that will help you to file the taxes and pay the money owed.
The good news is that the state of Pennsylvania will not require you to pay state taxes on the income as well.
For 2009 and only 2009 (so far), the government has changed the rules slightly because of the 2009 American Recovery and Reinvestment Act. As a result of this Act, the first $2400 of any unemployment income that you received will not be counted as taxable income. As a result, if you made less than that, then you won’t have to pay taxes on it. Anything above that amount and you will be required to pay the taxes associated with the income. The percentage of the taxes that you pay will base it upon your total income and put you within a specific tax bracket.
There are many tax software programs including Turbo Tax that will calculate all of this information for you, including the 2009 change to the rules. Paying taxes is a part of earning income, regardless of what it’s on. The only good part about it is that, through living in Pennsylvania, you won’t have to pay it twice.
If you plan on collecting a significant amount of unemployment benefits and don’t want a huge tax bill to pay at the end of the year, you may want to consider estimated taxes. Filling out a Form W-4V will withhold 10% of your benefits towards federal income taxes.
There are two kinds of taxes that people are required to pay: Federal and State. The federal government will require for you to pay taxes on this unemployment benefit money that you have received. You will receive a 1099 that will help you to file the taxes and pay the money owed.
The good news is that the state of Pennsylvania will not require you to pay state taxes on the income as well.
For 2009 and only 2009 (so far), the government has changed the rules slightly because of the 2009 American Recovery and Reinvestment Act. As a result of this Act, the first $2400 of any unemployment income that you received will not be counted as taxable income. As a result, if you made less than that, then you won’t have to pay taxes on it. Anything above that amount and you will be required to pay the taxes associated with the income. The percentage of the taxes that you pay will base it upon your total income and put you within a specific tax bracket.
There are many tax software programs including Turbo Tax that will calculate all of this information for you, including the 2009 change to the rules. Paying taxes is a part of earning income, regardless of what it’s on. The only good part about it is that, through living in Pennsylvania, you won’t have to pay it twice.
If you plan on collecting a significant amount of unemployment benefits and don’t want a huge tax bill to pay at the end of the year, you may want to consider estimated taxes. Filling out a Form W-4V will withhold 10% of your benefits towards federal income taxes.
