PEORIA, Ill. (WMBD) – Next year’s tax day may bring a surprise for many Americans receiving unemployment benefits.
The $600 you’ve been receiving each week is not considered earned income, and therefore has not been taxed before it reaches your pocket. A local tax expert says because of this, it will change the way your taxes are prepared. Meaning the tax refund you are used to getting, could be considerably less, or it could even take money out of your pocket.
“The way this was designed, the $600 was meant to pay mortgage, and to keep folks afloat without having disastrous results,” said President of Total Income Tax (Forrest Hills location), William Sharpe. “So a lot of folks that are on unemployment are making more than they made while working. Because of this, it’s going to be a bit of a domino effect, their income is going to go up, they’re gonna get taxed more, and they are going to receive a lot few credits at tax time.”
Sharpe says, at this time the best advice he can give, is to call the Illinois Department of Employment Security and request to have taxes taken out of the unemployment benefits.