Unemployment benefits and tax question

[graywarrior]

If people stay on unemployment for a year, how are they going to pay their federal and state taxes in 2010 if they can't get work?

[hobbit709]

1. You want the long answer or the short one?

The short one is: "You're screwed"

[soothsayer]

2. well, they won't have earned very much so prolly won't owe

[graywarrior]

3. I think they will.

[soothsayer]

8. but they withhold taxes just like a paycheck

[Holly_Hobby]

4. I don't remember who changed the law, probably Raygun,

but you didn't used to have to pay any income tax on unemployment.

[graywarrior]

6. I don't remember either

But we do and that's gonna suck for a lot of people unless they inform unemployment benefits to deduct taxes from their checks...like peope can afford that.

[soothsayer]

9. i had to pay taxes on mine 5 years ago, and i just got laid off again so I guess

I'll soon find out the current law. but back then I totally remember taxes being taken out.

[graywarrior]

11. I'm gonna call them tomorrow

maybe...i hate making contact. it's asking for trouble.

[doc03]

15. It was Reagan. He said unemployment was nothing more than

a paid vacation for Union workers. He didn't like the idea that a seasonal worker like someone in construction could work 9 months a year and maybe make $75000 then collect unemployment the other three months. So now you have to pay taxes on unemployment once you reach a certain level.

[2Design]

5. you need to save enough to pay - you have to check if state

requires income tax although some have a high threshold before paying taxes check your state - and then federal taxes - check federal and also ask at unemployment office or those outreach offices for the unemployed

[DesertFlower]

7. here's a link.

http://www.bankrate.com/brm/itax/news/tax_surprises/unemployment-benefits.asp

[MiniMe]

10. I collected unemployment for a while a few years ago. I had a choice about withholding

They asked if I wanted federal and state withheld, I said no because I had worked for half the year, and I needed the cash at that point. I didn't have to pay anything, because I had enough withheld for the 6 months I worked.

[Digit]

12. I am in NC and they NOW take taxes out

It is now mandatory, but that was not the case a couple of years ago.

At least that is what they are doing here.

[Kat45]

13. The government doesn't care.

When I was on unemployment a few years ago I didn't have taxes withheld because I had hoped to get a job fairly quickly. I didn't find a job and come tax time I owed taxes. Personally, I think it's sick to have to pay taxes when you've been out of work--especially when I see rich folks managing to avoid paying taxes.

[doc03]

14. I may be wrong but I don't think you have to

pay tax on un-employment alone. Reagan thought unemployment was a paid vacation for Union workers. He thought seasonal workers such as construction workers that work maybe 9 months a year and make a very good income should have to pay tax on their unemployment after a certain income level.