This is part 2 of an exploration talking about how unemployment effects income.

  • 2. Taxes

If you lose your job or otherwise become unemployed, one of the first things you should do is determine how your new financial situation affects your income taxes.loyment compensation is a form of monetary assistance provided by the federal and state governments to people who are out of work. These benefits are mostly funded by taxes that are paid by employers at the federal and state levels.

Generally, employees who are laid off or who lose their jobs through no fault of their own typically qualify for unemployment benefits. The amount of compensation they receive depends on the amount of time they worked, their earnings and the maximum benefit their state allows for.

Taxpayers who want to receive unemployment compensation must apply for benefits through their state programs.Unemployment benefits are included along with your other income such as wages, salaries, and bank interest. The total amount of income you receive and your filing status will determine if you need to file a tax return.

By- Omeir Baker

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