This has been the craziest year, wouldn’t you agree? So many people have been in lockdown, businesses were closed or closing, unemployment has seen record-breaking numbers! And, I’m sure people are grateful there is unemployment to fall back on, but with so many layoffs and uncertainty about future employment, no one is considering the tax implications of all that unemployment.
The short and Not-Too-Sweet answer: Yes! Unemployment is taxable income for your IRS individual tax return. And, If you live in a state like our NYS, then it is taxable by the state also!
Please be prepared for the many changes and possible surprises this tax season, talk with your Tax Pro or give up a call at Michael A. Cook LLC (mcooktaxes.com).