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Does unemployment compensation wages affect earned income credit on your taxes?
Wiki User
∙ 13y ago
Yes, it can. However, it cannot help you, only hurt you. First of all, for 2009, the first $2,400 of unemployment compensation is not taxable, so it doesn't affect your taxes in any way. Above $2,400, it is taxable and increases your AGI (adjusted gross income).
The earned income credit (EIC) phases in at 40% of earned income until it reaches the maximum credit. (See the IRS link below for specific amounts.) Unemployment compensation does not count as earned income, so it does not increase your credit.
After you max out the credit, it starts to phase out as your income increases. The income amount used here the greater of your earned income or your AGI. Therefore, if your AGI is made up only of earned income and unemployment compensation, your EIC will be reduced because of your unemployment compensation.
There are many other items than can increase or decrease your AGI, including interest income, IRA contributions or withdrawals, student loan interest, and many more. So you could potentially offset the unemployment compensation with other deductions from AGI, such as contributing to an IRA. (Of course, you probably don't have the cash for that if you're collecting unemployment.)
Here is a link to the EIC figures for 2009 (at the bottom of the page):
http://www.irs.gov/individuals/article/0,,id=150513,00.html
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Unemployment does NOT count towards your EIC because it is not EARNED. Your UC is applicable to federal taxes only. The IRS EIC calculator takes UC into consideration although it is not correct.
Wiki User
∙ 13y ago
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Is unemployment compensation taxable in the city of Pittsburgh Pa?
Unemployment Compensation is considered non-taxable income for the Earned Income Tax.
You only received unemployment for 2009 will you be eligible for earned income credit?
Unemployment benefits are not "earned income", so you should not be eligible for earned income credit.
Is unemployment compensation earned income when receiving social security benefits?
no
Can you get earned income back if you are on workerscomp?
NO workers compensation for an on the job injury is not qualified taxable earned income for the earned income credit.
If your only income for the year is unemployment can you file taxes and still get a refund?
Anyone can file taxes.You can only get a refund if you overpaid taxes during the year or qualify for some refundable tax credit such as the Earned Income Credit or the Additional Child Tax Credit.The most likely reason you might get a refund would be if you had taxes withheld from your unemployment compensation.
Is it true that Unemployment compensation benefits received are taxable to the person that receives them?
Yes - because it's classed as 'un-earned income'.
When drawing Social Security does unemployment benefits count towards the amount you can make?
No. What counts is what you earned, and that does not include government benefit programs, which is what unemployment compensation is. See Related Link below.
Can claiming a life insurance policy affect unemployment benefits?
Generall not since unemployment benefits are related to earned income from losing a job.
Can unemployment benefits be used towards earned income credit?
no not in ny . unless you have worked atleast 6 months prior
Is unemployment checks considered income?
Yes it is taxable income that has to be reported as such on your 1040 income tax return. For the tax year 2009 the first 2400 of unemployment compensation received will not be taxable income that would have to be added to all of your other gross worldwide income and taxed at your marginal tax rate.
If you received unemployment all year can you get the child tax credit?
just went and did our taxes..my husband was on unemployment all year with no earned income and we didnt qualify for EIC or Child tax credit and have a 18 month old son. sucks but whos gonna take on the IRS
Can you get EIC if you had no income last year?
No, the Earned Income Credit is based on whether or not you have what the IRS considers qualifying earned Income. Earned income most commonly is derived from wages earned from a W-2 as an employee or net self employment from a business. Retirement income and unemployment compensation benefits do not count as earned income. Keep in mind that the amount of EIC you receive is based on amount of earned income (this phases out based on total earned income, filing status, and whether you have 0, 1,2, or 3 or more qualifying children). You must meet other criteria as well.
