Unemployment. How does it get taxed?

[tvguy]

Posted this on the budget board as well. Curious about this. If someone qualifies for say $500 a week, do they get a check for $500 and pay taxes on it later at tax time? Or do they tax it right away so the check isn’t the entire $500?

I had to look because I thought $500 was an amazing unemployment benefit. At least in California, $450 is the maximum benefit per week.

 

[sksjasams]

I had to look because I thought $500 was an amazing unemployment benefit. At least in California, $450 is the maximum benefit per week.

$370 max benefit in WI

 

[dish rag]

Common sense.

Ok you spoke as if it were a fact so I thought you had heard it was so.

 

[fsjking]

So I have a unemployment question maybe someone can answer....I work at a child care facility that is still open but there have only been 2-3 kids(essential parents) a day, so the owner is the only one working... she told me I could come in for hours if I want but I told her I didn't need to unless she absolutely needed me so she didn't have to pay me when I'm not needed and she's not making money. A friend said I should file for unemployment...if I were to do that, does that affect my employer? Is she paying my unemployment or does she gets some kinda fine or something....lol I'm not sure how it works... never had to do it before and I don't want to make her payout anymore right now when her business is hurting, ya know. Hubby is an essential worker so he's still working and getting paid but we're a little tighter than I like without my pay.

In Massachusetts at least, the employer has already paid the unemployment tax for each employee before someone files a unemployment claim. So your employer does not get dinged going forward if you file a claim.

Also, someone can work part-time and still collect benefits. You can even collect your full unemployment benefit even while working part-time. You can only earn up to 1/3rd of your weekly benefit though. Say your unemployment is $600 per week; you can collect $200 per week and continued to collect your full benefit amount. You can also continue to collect above that 1/3rd threshold but it is reduced dollar-for-dollar until you reach your weekly benefit amount (so if you earn $201 part-time, you can receive $599 in weekly benefits).

I can't speak for your state, but here, the amount of people on unemployment and how long they are affect the future unemployment tax for the company. The more that collect, the higher their rate will go. That rate is on all of their employees, not individuals. In the past I've had an employer choose to just pay me for a couple months of not doing much rather than having me go on unemployment and it affecting the entire company.

Ultimately, I think its a conversation you should have with your employer. I'd never go on unemployment without discussing it with them. If they aren't happy about it, when they get the notice, they can report that you turned down work. Then you may not get unemployment, and may end up actually unemployed. It may not be a big deal to them at all, but you absolutely need to have that conversation with them.

 

[AuntieMe3]

I can't speak for your state, but here, the amount of people on unemployment and how long they are affect the future unemployment tax for the company. The more that collect, the higher their rate will go. That rate is on all of their employees, not individuals. In the past I've had an employer choose to just pay me for a couple months of not doing much rather than having me go on unemployment and it affecting the entire company.

Ultimately, I think its a conversation you should have with your employer. I'd never go on unemployment without discussing it with them. If they aren't happy about it, when they get the notice, they can report that you turned down work. Then you may not get unemployment, and may end up actually unemployed. It may not be a big deal to them at all, but you absolutely need to have that conversation with them.

I'm the only fulltime employee, the other had just gave notice and had her last day the week before. The new employee hadn't started working yet. I've been there off and on for over 20 years, just never had to do unemployment. I contacted her and let her know I was thinking of filing and she told me to do it, so I did.