Millions of people continue to receive unemployment benefits and many have chosen not to deduct federal taxes from that income, but failure to do so could bring on headaches.
In the United States, all income is taxed and this includes not only unemployment benefits, but also the pandemic relief help of $600 that many have received in the past months, or the $300 that is currently being distributed, and those taxes are not forgiven.
Although it is an additional help because we are in a time of crisis, the hundreds of dollars that many people are receiving from their unemployment benefits are still subject to tax collection, so if you don't deduct it this year, in 2021, Uncle Sam is going to charge you.
"We live in a country where there is a tax system, but we are taxpayers, we have to obey the laws, and pay our taxes," said Irma Treviño, IRS spokeswoman.
The additional support money, not only from unemployment benefits but any financial aid granted by municipal governments, is different from the economic stimulus that many families received -- that stimulus money is tax-free.
"Only the economic stimulus payment they received previously was a gift from the Treasury Department," said Treviño.
When filing for unemployment, the IRS recommends that you select the automatic deduction to avoid problems.
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"Please make the effort to have the tax withheld so that you avoid problems next year," Treviño added.
Treviño also said that if you have questions about how much you should be withholding from each payment, you can verify the amount on the www.irs.gov website.
The tax payment is not forgiven, and most likely, if you decide not to deduct them this year, it will be reflected in a reduction of your refund when filing your 2021 return.
