If you received unemployment benefits in 2022, you may be unsure if you are required to include this income on your tax return.
Even though there was a brief period when unemployment money was not taxed, the answer is unquestionable yes.
Rules Under Unemployment Benefits
After widespread COVID-19 shutdowns forced millions of people from their jobs in 2020, the national unemployment rate hit an all-time high.
In a time when finding a job was incredibly difficult, politicians were fast to not only deposit much-needed stimulus cheques into Individuals’ bank accounts, but also increase benefits to assist jobless employees in staying afloat.
To further alleviate the burden on the unemployed, the American Rescue Plan was passed into law in 2021 with a clause that made up to $10,200 in unemployment benefits collected in 2020 exempt from taxation.
Thus, there may be uncertainty over the taxability of unemployment benefits. But, you should be aware that the tax-free status of unemployment payments was only extended to 2020.
So, if you got unemployment benefits from your state in 2022, you must declare it as taxable income.
Read more: SNAP benefits: Reduced payments are putting low-income individuals at risk of hunger
Look For Form 1099-G In The Mail
You should have kept meticulous records of the unemployment benefits you got in 2018 so that you may appropriately declare this income on your tax return for 2022. But if not, have no fear.
You should receive Form 1099-G detailing the amount of unemployment income you received in 2022 and the amount of tax withheld, if any, from those payments.
While some states mail out this form, others make it available online, some states. If you received unemployment benefits last year but are lacking this form, be sure to visit the website for your state and try to locate it there so you can accurately fill out your tax return.
If you use the incorrect credit or debit card, you could be losing a significant amount of money. Our experts adore this top option because it has no annual fee, an incredible cashback rate of up to 5%, and a 0% introductory APR until 2024.
Read more: 2 COVID-19 vaccines do not prevent reinfection, new study reveals
