Syracuse, NY – The $ 900 billion Covid aid package approved by Congress in December provides an extra $ 300 in 11-week unemployment payments.
If you are collecting unemployment – or you will be unemployed for the next 11 weeks – there is nothing you need to do to receive the extra $ 300. You will receive it automatically in your weekly unemployment payment.
But will you have to pay income tax on that $ 300 unemployment bonus? Unfortunately, the answer is yes, you will.
Federal governments and states like New York, which impose state income taxes, treat unemployment payments as income. Therefore, you will have to report all of your unemployment benefits, including the extra $ 300, as income when filing your 2020 tax returns.
The good news is that if you were to tell the state Department of Labor to withhold taxes on your unemployment payments (as it should), you shouldn’t be hit with a big tax bill on those payments when filing your tax returns.
Rick Moriarty covers business news and consumer issues. Have a tip, comment or idea for a story? Contact him anytime: The e-mail | Twitter | Facebook | 315-470-3148