Unemployment Benefits Is An Equivalent Of Your Salary
Kevin had been unemployed for almost two years now but he was regularly receiving his unemployment benefits from the state government. It was not as if he was not trying to get a job but he had been unwell for almost a year now and that was the primary reason why he lost his job. When it was time to pay the yearly tax he came to know that the unemployment benefits that he received would also be taxed. So he came to visit me and asked me whether there was a provision for unemployment benefits tax exemption under the income tax laws. I told him that there were no such provision and if he received financial help in any form it would be subject to income tax. He could not understand the reason for the tax being applied because he did not have a job. I told him the unemployment benefit that he received amounted to his salary hence he had to pay tax. This is the story of hundreds of people who receive unemployment benefits each year but don’t realize that they have to pay tax for it.