


Some people can expect to pay a larger share in taxes this year because the rules pertaining to how taxpayers account for unemployment benefits are changing.
Unemployment benefits received by recipients in 2020, when the COVID-19 pandemic began, were approached differently thanks to the American Rescue Plan. It excluded qualifying taxpayers from paying taxes on up to $10,200 of unemployment benefits.
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This year, the rules regarding unemployment benefits have reverted back to their pre-COVID-19 guidelines, meaning that taxpayers can expect to pay taxes on any unemployment benefits they received in 2022, according to Woman's World.
To prepare for paying unemployment benefits when filing taxes this year, taxpayers can have their state’s unemployment agency withhold 10% from their unemployment check to help cover whatever tax arises from these benefits.
Taxpayers should also check the rules regarding their state and local taxes, as some states will not subject one's unemployment income to any state taxes. These states include Alabama, Alaska, California, Florida, Montana, Nevada, New Hampshire, New Jersey, Pennsylvania, South Dakota, Tennessee, Texas, Virginia, Washington, and Wyoming.
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Indiana and Wisconsin will subject a portion of a taxpayer's unemployment benefits to taxes.
Residents of every state can visit their state's department of revenue website and check what income taxes will be required in their state. Taxpayers should also check their county, city, or town websites to see if they have any income taxes so as to not be caught off guard when filing their taxes.