Tax Musings of a Burbank CPA: Five Key Facts about Unemployment Benefits

If you were unemployed last year you probably got unemployment benefits from your state or other locality.  See this IRS tip about unemployment benefits:

http://content.govdelivery.com/accounts/USIRS/bulletins/f4e36c?reqfrom=share

The two most important things are that the benefits are federally taxable (usually not state taxable) and you can elect to have federal income tax withheld from the benefits.  This is important if you are still on unemployment benefits in the current year and want to avoid owing income taxes at this time next year.

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