NewsCommunityVista SemanalLocal

Actions

Central Coast residents who received unemployment benefits reminded of tax responsibility

Campaign 2016 Why It Matters Taxes
Posted at 7:51 AM, May 13, 2020
and last updated 2020-05-13 10:52:53-04

The latest U.S. job numbers show the pandemic costing the nation over 20 million jobs and forcing countless workers to apply for unemployment.

But unlike the $1,200 stimulus check many Americans received, the $600 weekly unemployment checks are taxable.

Pres. Donald Trump alleged earlier this week that some states run by Democrats weren't moving quickly enough to reopen.

"The people want to get back, they're not going to stand for it," Pres. Trump said. "They want our country open, I want our country open too."

In the meantime, people who have been laid off due to the coronavirus are paying for vital needs like groceries, medications, and rent.

"The federal withholding is not being withheld from the payments unless you volunteer for it," Misty Little, an enrolled agent in Grover Beach, said.

Little said, unlike the automatic tax deductions taken from our paychecks, unemployment checks require an extra step to ensure you don't owe money later.

"There's a form called the W-4V that does allow them to withhold 10 percent on your behalf," Little said.

Though tax obligations depend on your personal tax bracket, Little said 10 percent should protect you from fines next year.

"If they owe over $1,000 they could also face penalties and interest from the IRS on it," Little said.

But for some families, the belt is getting tighter and every dollar of the unemployment benefits is critical to survival.

"Some families need that money now," Little said. "That's the scary part about this whole situation. A lot of people need that money to put food on the table."

There is a bit of relief: families that can't make tax payments in full each quarter can avoid penalties by paying at least 90 percent of taxes owed.

The full amount of taxes owed on unemployment benefits must be paid by April 15, 2021.

There is an additional tax form to fill out if you received an unemployment check this year.