According to U.S. Department of Labor Statistics, over 23 million workers applied for unemployment benefits this year. With so many people seeking aid, the Internal Revenue Service (IRS) needs help reminding people that unemployment benefits are taxable.
Credit unions should consider sharing information on this topic with their members. To help, the IRS has created a pamphlet that can be distributed to members and/or posted in lobbies. The document outlines how members can have income tax withheld from their unemployment compensation and make tax payments. The IRS also has a withholding estimator on its website to help members calculate what they might owe.
As financial navigators, it is important that credit unions educate their members on financial issues like this to help ensure no one gets caught off-guard when it comes time to file taxes next year.