Here's why you should set aside some of your unemployment benefits

Jeff Ehling Image
Monday, August 31, 2020
Unemployed Texans might get $300 more in benefits
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Money that comes in the form of unemployment benefits is taxable income, so be sure to set aside some of it for April 15.

HOUSTON, Texas (KTRK) -- Texans could start seeing an extra $300 in their unemployment check.

Pres. Trump's executive order gave states the option to put more money into the hands of those out of work, but people receiving the benefits will have to pay taxes on the money received.

Unemployment benefits are considered taxable income, and withholdings are not taken off them. So be prepared to pay the taxes by April 15.

"It is a common misconception because when you are on unemployment, you are on hard times, and it doesn't seem like it is income," said Certified Public Accountant Michelle Mullen. "However, because it is a replacement for wages and wages are taxable, it is fully taxable."

CPAs recommend setting aside a small percentage of the check to pay any potential tax liability.

A tax deduction that was available to job seekers in the past is no longer applicable.

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