Federal unemployment compensation benefits are not taxable.

Question

Quizplus · Accepted Answer

Federal unemployment compensation benefits are taxable income and must be reported on your federal tax return. However, under the American Rescue Plan Act signed into law in March 2021, the first $10,200 of unemployment benefits received in 2020 are exempt from federal income tax for those with an adjusted gross income of less than $150,000. State unemployment benefits may also be taxable, depending on the state. It's important to consult with a tax professional or use tax software to accurately report and file your taxes.

Federal Unemployment Compensation Benefits Are Not Taxable