Are your Social Security benefits deducted from your unemployment benefits?

Answer 1

Most states no longer penalize Social Security recipients with unemployment offsets, but five states -- Illinois, Louisiana, South Dakota, Utah and Virginia -- currently reduce weekly unemployment benefits by 50% of your prorated monthly Social Security check.

South Dakota and Virginia have repealed their offset laws, but still have a provision allowing them to deduct Social Security benefits from unemployment checks when state unemployment funds fall below a pre-determined threshold. The long recession and high unemployment rate triggered the offset in both states.

Answer 2

In the US, unemployment insurance is completely separate from social security taxes.

Employers pay federal (FUTA) unemployment insurance for each employee based on the employee's earnings. Most employers also pay state (SUI) unemployment insurance. Unemployment insurance is an employer expense. The employee does not pay into the unemployment insurance fund.

In the US, employement taxes are funded as follows:

Employee Pays (Withholding)

Federal Income Tax

FICA-Social Security

FICA-Medicare

State Income Tax

State Disability Insurance

Employer Pays (Tax Expense)

FICA-Social Security (matches employee withholding)

FICA-Medicare (matches employee withholding)

Federal Unemployment Tax Act (FUTA)

State Unemployment Insurance (SUI)

Employment Training Tax (ETT)

NOTE: this breakdown is for California. State employment taxes may differ in other states.

Answer 3

Social security and medicare taxes are NOT deducted from unemployment compensation payment.

Answer 4

Nope. It doesn't.