Five Important Facts About Your Unemployment Benefits by theyne


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									 IRS Tax Tips                                                                           February 11, 2010

Useful Links:                Issue Number:              IRS Tax Tip 2010-29 Home                 Inside This Issue
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                                 Five Important Facts About Your Unemployment
                             Taxpayers who received unemployment benefits in 2009 are entitled to a special tax
News Essentials              break when they file their 2009 federal tax returns. This tax break is part of the
                             American Recovery and Reinvestment Act of 2009.
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                             Here are five important facts the Internal Revenue Service wants you to know about
News Releases                your unemployment benefits.

                                 1.   Unemployment compensation generally includes any amounts received
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                                      under the unemployment compensation laws of the United States or of a
                                      specific state. It includes state unemployment insurance benefits, railroad
IRS Guidance                          unemployment compensation benefits and benefits paid to you by a state or
                                      the District of Columbia from the Federal Unemployment Trust Fund. It does
Media Contacts                        not include worker's compensation.
                                 2.   Normally, unemployment benefits are taxable; however, under the Recovery
                                      Act, every person who receives unemployment benefits during 2009 is
Facts & Figures                       eligible to exclude the first $2,400 of these benefits when they file their
                                      federal tax return.
Problem Alerts                   3.   For a married couple, if each spouse received unemployment compensation
                                      then each is eligible to exclude the first $2,400 of benefits.
                                 4.   You should receive a Form 1099-G, Certain Government Payments, which
Around The Nation                     shows the total unemployment compensation paid to you in 2009 in box 1.
                                 5.   You must subtract $2,400 from the amount in box 1 of Form 1099-G to figure
e-News Subscriptions                  how much of your unemployment compensation is taxable and must be
                                      reported on your federal tax return. Do not enter less than zero.

                             For more information, visit

The Newsroom
Topics                       Links:

Electronic IRS Press Kit             The American Recovery and Reinvestment Act of 2009: Information Center
                                     IR-2009-29, First $2,400 of Unemployment Benefits Tax Free for 2009
Tax Tips 2009
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                                     Unemployment Compensation - January 2010: English | Spanish
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