Due to COVID-19, many members are facing unexpected financial challenges. According to a recent article in the Portland Press Herald, more than 138,000 people have filed for unemployment benefits since March. Filers may not realize that they don’t get to keep 100% of the assistance they receive. Unemployment benefits are taxable in the state of Maine and at the federal level, and filers should plan on reporting this income on next year’s tax return.
Earlier this week, the Huffington Post examined this topic and offered recommendations for paying unemployment tax. These include:
- Requesting to have taxes withheld
- Making quarterly estimated tax payments
- Paying the full amount in April 2021 (this option would require filers to save ahead)
Reminding your members now that COVID-19 unemployment benefits are taxable is timely—especially since it could prevent them from taking a huge financial hit down the road.
To read more about this topic, visit CNBC.