If you filed for PUA you better make sure you have been properly reporting your income on past and future tax returns

Expect a ton of future audits, the Federal Government isn't going to just give money away and not eventually verify qualifications.

My posts are solely based on my opinions and for my entertainment, contact a professional if you need real advice.

When you get in debt you become a slave. - Andrew Jackson

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@isaiah58 wrote:

Expect a ton of future audits, the Federal Government isn't going to just give money away and not eventually verify qualifications.

You are over estimating the IRS and the amount of time spent on low scoring returns.
I wonder how we are going to have to report the unemployment income for our 2020 tax returns. The state doesn't have any statements or anything for how much money they've paid me so far so I'm actually not sure how they've been calculation my money.
State unemployment is taxable income. I wouldn't be surprised if Federal unemployment was also taxable.

The state will keep track of what they pay you and send a 1099.
Yes, at $600 a week for 13 to 26 weeks you darn skippy they will keep track. I would say that as long as your records are OK and they have not audited you before you SHOULD be OK.

You should select to have taxes taken out if you are offered that option. Whenever I was unemployed and getting UI I did.

Edited 1 time(s). Last edit at 05/11/2020 03:46PM by 2stepps.
In CA, unemployment us not taxable. They will take federal taxes out if you ask them to do so.

My friends who are receiving PUA requested to have taxes deducted, and it was only taken from the EDD award, not the $600 stipend. We have yet to see if that will actually be taxed. There's is some conflicting information out there....
@SteveSoCal wrote:

In CA, unemployment us not taxable. They will take federal taxes out if you ask them to do so.

My friends who are receiving PUA requested to have taxes deducted, and it was only taken from the EDD award, not the $600 stipend. We have yet to see if that will actually be taxed. There's is some conflicting information out there....

I requested both state and federal taxes be taken out and they've been taking federal and state taxes out of my extra $600. Obviously this is just anecdotal, but I do think the $600 extra will be taxed.
@chiffon cupcakes wrote:

I requested both state and federal taxes be taken out and they've been taking federal and state taxes out of my extra $600. Obviously this is just anecdotal, but I do think the $600 extra will be taxed.

What state are you in? It's kind of interesting that each state is handling this so different...but also totally confusing.
@SteveSoCal wrote:

@chiffon cupcakes wrote:

I requested both state and federal taxes be taken out and they've been taking federal and state taxes out of my extra $600. Obviously this is just anecdotal, but I do think the $600 extra will be taxed.

What state are you in? It's kind of interesting that each state is handling this so different...but also totally confusing.

My UI is coming from Iowa. I'm trying to check the numbers right now (the website isn't very detailed, so I don't know how to check for previous payments or the original documents), but I want to say the federal is 10% and my state is 5%. I get a total of 15% taken out, so my $600 becomes $510.
@shopper8 wrote:

Tstewart3 Can you verify this statement.

From the IRS website:

Unemployment Compensation

Unemployment compensation generally includes any amounts received under the unemployment compensation laws of the United States or of a state. It includes state unemployment insurance benefits and benefits paid to you by a state or the District of Columbia from the Federal Unemployment Trust Fund. It also includes railroad unemployment compensation benefits, but not worker's compensation.

If you received unemployment compensation during the year, you should receive Form 1099-G, showing the amount you were paid. Any unemployment compensation received must be included in your income.

Page Last Reviewed or Updated: 11-May-2020

From Kiplinger:

The majority of states follow the federal government and fully tax unemployment benefits.

Further research into states that don't fully tax unemployment:
Alabama, California, Montana, New Jersey, Pennsylvania, Virginia.
And of course states who don't tax because there is no state income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
In NJ, the website says both UE and the extra $600 are taxable.

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@shopper8 wrote:

Tstewart3 Can you verify this statement.

I am in Maryland. I received unemployment last year. Maryland provided a 1099. They only offered to deduct Federal taxes, which I opted into.

Maryland offered to deduct Federal taxes from the $600 Federal offset, I also opted in. This implies that Maryland will include this information on the 1099 forms they will send out next year.

My posts are solely based on my opinions and for my entertainment, contact a professional if you need real advice.

When you get in debt you become a slave. - Andrew Jackson
@SteveSoCal wrote:

@chiffon cupcakes wrote:

I requested both state and federal taxes be taken out and they've been taking federal and state taxes out of my extra $600. Obviously this is just anecdotal, but I do think the $600 extra will be taxed.

What state are you in? It's kind of interesting that each state is handling this so different...but also totally confusing.


My daughter in New York is still trying and is having no luck. Yet my state was right on the ball with no hesitation at all.

sestrahelena
@MsJudi wrote:

In NJ, the website says both UE and the extra $600 are taxable.

Myunemployment.nj.gov says:
Although the state of New Jersey does not tax unemployment insurance benefits, they are subject to federal income taxes.
@sestrahelena wrote:

@SteveSoCal wrote:

@chiffon cupcakes wrote:

I requested both state and federal taxes be taken out and they've been taking federal and state taxes out of my extra $600. Obviously this is just anecdotal, but I do think the $600 extra will be taxed.

What state are you in? It's kind of interesting that each state is handling this so different...but also totally confusing.


My daughter in New York is still trying and is having no luck. Yet my state was right on the ball with no hesitation at all.

Also, New York only accept applications through Internet Explorer or Netscape. WTF? Who even uses those anymore.

sestrahelena
@sestrahelena; The CA EDD system was written in a computer language so old (COBOL) that they had to put out a search for a programmer who knew it to adjust the system. I studied COBOL in high school and it died in the late 80's....

For those who still need clarity on what's taxable, I also posted a good CNN article about the deductions/exemptions from the EDD stimulus in this other thread about it:

[www.mysteryshopforum.com]
In Massachusetts the PUA is a brand new system as of April 20th. The system is easy and efficient. On the regular unemployment the question was asked about taking taxes out, which you should. The PUA is not the same, no questions asked about taxes. I have been trying to get an answer on the .gov site, no answer. As far as I know taxes will not be taken out of the $600 federal money. I still can't say for sure.
My understanding is that unemployment/$600 Cares $$ will not be taxed by the state of California but we are still liable for federal taxes.

@SteveSoCal wrote:

In CA, unemployment us not taxable. They will take federal taxes out if you ask them to do so.

My friends who are receiving PUA requested to have taxes deducted, and it was only taken from the EDD award, not the $600 stipend. We have yet to see if that will actually be taxed. There's is some conflicting information out there....
My understanding as well, but they are not taking Fed taxes out. Strange...

Did you get paid yet?

Of my 10 friends that applied, 2 have received $$ and the rest are all tied up in red tape.....

@sandyf wrote:

My understanding is that unemployment/$600 Cares $$ will not be taxed by the state of California but we are still liable for federal taxes.

@SteveSoCal wrote:

In CA, unemployment us not taxable. They will take federal taxes out if you ask them to do so.

My friends who are receiving PUA requested to have taxes deducted, and it was only taken from the EDD award, not the $600 stipend. We have yet to see if that will actually be taxed. There's is some conflicting information out there....
Yes, I applied I think April 29th and got my card with I think 5 weeks worth of cash on it yesterday. I have to load it to my bank to see the balance. I will do that today but i think it will include both PUA and the $600. Mine went faster because I called tech support around the 1st of May and the guy pushed my online app through. and filled out all the weekly reports for me.
@SteveSoCal wrote:

My understanding as well, but they are not taking Fed taxes out. Strange...

Did you get paid yet?

Of my 10 friends that applied, 2 have received $$ and the rest are all tied up in red tape.....
To be on the safe side, it would probably be best for anyone who is involved in any of the unemployment or government offerings at this time retain all their records indefinitely instead of the 7 plus years that the IRS recommends.

sestrahelena
Wondering why you are recommending this. Reasoning?

@sestrahelena wrote:

To be on the safe side, it would probably be best for anyone who is involved in any of the unemployment or government offerings at this time retain all their records indefinitely instead of the 7 plus years that the IRS recommends.
I would guess it's only a matter of time before somebody in Congress wants to make the $600 non-taxable. Whether they'll succeed is another story, but surely somebody will propose it. It's an election year, after all.
@sandyf wrote:

Wondering why you are recommending this. Reasoning?

@sestrahelena wrote:

To be on the safe side, it would probably be best for anyone who is involved in any of the unemployment or government offerings at this time retain all their records indefinitely instead of the 7 plus years that the IRS recommends.

Because when things straighten out somewhat, the government might take extra steps to find money owed to them which could include auditing everyone in an attempt to find lost revenue. It happened in one state where they went back about 20 years and started mailing out tickets and fines for supposed infractions. People did not all have records from so long ago to prove non-guilt so they were forced to pay, including extra fees.

sestrahelena
@sestrahelena wrote:

@sandyf wrote:

Wondering why you are recommending this. Reasoning?

@sestrahelena wrote:

To be on the safe side, it would probably be best for anyone who is involved in any of the unemployment or government offerings at this time retain all their records indefinitely instead of the 7 plus years that the IRS recommends.

Because when things straighten out somewhat, the government might take extra steps to find money owed to them which could include auditing everyone in an attempt to find lost revenue. It happened in one state where they went back about 20 years and started mailing out tickets and fines for supposed infractions. People did not all have records from so long ago to prove non-guilt so they were forced to pay, including extra fees.


Can you provide details of a state going back 20 years?
There's quite a bit to unpack here.

@sestrahelena´╗┐; While that's an accurate and crazy example of a state potentially overstepping it's right for collection, it's also just that...crazy. They have no hope of collecting on fines that old, which were never accurately levied in the first place, and that is also about fines for documentation that citizens had already failed to submit.

The biggest issue I have is with the OP's supposition, though. There's a lack of understanding there about where the money comes from, who distributes it, and who collects anything due. They are not always one and the same.

The PUA is distributed by the state unemployment office. Audits are generally coming fro the IRS. These are 2 agencies with a long history of not communicating well. The federal government IS specifically giving money away without verifying qualifications. It's the job of the states to then qualify applicants and then distribute the money.

All the IRS cares about is if you pay taxes on income that's taxable. Receive income. Pay tax. No worry of audit.

If you don't pay tax on income received and after 7 years, they somehow decide to come after you....that's where the whole 7 year rule comes into play! You are no longer required to show said documentation to prove your case.

The remaining party is the state unemployment office. It's already been stated in CA that they will be conducting audits of the PUA funds once they have the available manpower, but most of that is in the case of awarding ore more money, not collecting overpayments. If you earned money while collecting unemployment, it's your responsibility to report that, and there's chance that's potentially higher than one of an IRS audit that the agency may come after you for a refund of funds paid to you if you did not. If you are still receiving unemployment, they can either stop your distribution, or take the funds from there...but again, after 7 years, i don't think there's any expectation for you to have supporting paperwork. And in that specific case, they would be supplying the paperwork since you won't need evidence of finds that you supposedly did not earn!
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