Sam was unemployed for the first two months of 2018. During that time, he received $4,000 of state unemployment benefits. He worked for the next six months and earned $14,000. In September, he was injured on the job and collected $5,000 of workers' compensation benefits. Sam's Federal gross income from the above is $18,000 ($4,000+ $14,000).

Question

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Sam's Federal gross income for 2018 includes the $4,000 of state unemployment benefits and the $14,000 he earned from working for six months, totaling $18,000. The $5,000 of workers' compensation benefits are not considered taxable income and are not included in his Federal gross income.

Sam Was Unemployed for the First Two Months of 2018