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Why Should the Unemployed Pay Taxes on Unemployment Benefits?

Barack Obama is pledging that, if he is elected President, he will temporarily suspend the requirement that Americans collecting unemployment benefits pay taxes on those benefits. Republicans – that’s a tax cut.

I’d like somebody to explain to me why people who have lost their jobs and are temporarily getting by by collecting unemployment benefits should have to give a portion of those benefits back to the government.

If Republicans really don’t like taxes, how come they’re not joining Barack Obama in opposing these unemployment taxes?

26 thoughts on “Why Should the Unemployed Pay Taxes on Unemployment Benefits?”

  1. kevin says:

    err because its income?

    If you make $150,000 per year and get laid off and colect another 10,000 in benefits..

    that’s part of your taxable income.

    If you don’t make enough to pay taxes then it does not matter that UBs are taxable.

  2. Rowan says:

    Is it income, or is it a benefit? Do you get taxed on your health care benefits, when you receive that money when you get sick?

    Besides that, it’s exceptionally inefficient to provide a financial benefit, and then ask for a certain portion back, reported on tax forms, and processed through the IRS.

    I say cut down on the procedures needed to do that, while providing economic stimulus – eliminate the unemployment tax.

    And why, Kevin, aren’t Repubicans against this tax? Because it’s a tax against people who can’t afford lobbyists?

  3. kevin says:

    I don’t know. I don’t know any Republicans.

    Hadn’t heard it brought up before.

    “Besides that, it’s exceptionally inefficient to provide a financial benefit, and then ask for a certain portion back, reported on tax forms, and processed through the IRS”

    Yes, well I find it terribly inefficient and burdensome even filling out an income tax return so let’s do away with that as well.

    And if I get a refund on my state taxes…I don’t want that reported as income either…

    1. unemployed says:

      thanks uncle sam kick me when i’m down paying tax on tax on tax and tax tax, is a program stallin would be prould of. rip off the poor to feed the rich who don’t pay tax. where is robin hood when u need him. i say if u make 50,000 a year or less u pay no tax…………. let the rich which the poor have tax. and where is my unemployment bail out ? wall street fat cats. choke on the poors money. while my wife and kids starve and live on the cold street to pay your big severence package

      1. Serpentine says:

        Unemployed, if you’re really unemployed, what taxes are you paying? What tax on tax on tax? You’re paying sales tax, but if your wife and kids starve and live on the cold street, you’re not paying property tax, and you’re not paying income tax.

  4. Steve says:

    One Question: If youre not working,isnt that a hardship enough? Then on top of that youre faced with a huge tax bill at the end of the year,that you cant pay! And why cant you pay it? Well,DUH, because youve been out of work all year!!Seems to me ,its a common sense problem,with a common sense solution,END the tax on unemployment!!!

  5. Steve says:

    Has anone noticed,that not one of the cable news networks,such as CNN,or Fox news will not discuss the S155 bill (temporarily suspending tax on unemployment benefits)?? Have you also noticed,the President,nor any other politician have even brought up the subject?? Isn’t that a little strange??

    1. Juniper says:

      It’s all too ordinary for mainstream news to provide more coverage to what movie actors are doing than to what our elected representatives in Congress are doing.

  6. Steve says:

    By the way ,wasnt that the #1 campaign promise of both Mr.Obama’s AND Mr.Mcain’s???

  7. Steve says:


  8. eric manry says:

    The democrats just shot this bill down as a party-line vote!

    U.S. Congressman Sam Johnson (3rd Dist.-Texas) authored a provision to temporarily eliminate the federal income tax on unemployment benefits for 2008 and 2009 as part of the economic stimulus bill, H.R. 598, before the Ways and Means Committee.

    President Obama had just said Wednesday that he had no objection to removing federal income tax on unemployment benefits for the years 2008 and 2009.

    While President Obama expressed his support for removing the tax on unemployment benefits (, the Committee Democrats defeated Johnson’s measure on a party-line vote.

    “As we work to find ways to kick start the economy, I propose that we don’t kick folks when they’re down and that we eliminate the tax on unemployment insurance benefits for 2008 and 2009,” said Johnson.

  9. ron repo says:

    As sad as it sounds… the great democratic nation is always the saddest to fall on display. Most 2nd world growing European countries and even the so called non standard democratic nations have better social and economic laws. You travel aboard to any other country and you hear of the benefits they have. You name it, Canada, France, Belgian, Switzerland…. and the list goes on and on. I wish this stupid battle between the rich tax cutting republicans and the inept democrats end. Both parties are still being pimped around by corporate America and the lobbyist.

    I know people say it is income, but it is income as a service you have been paying for already. Might as well start charging all those retired folks. Hell if they are about to die, might as well tax them to death too… it seems nobody is willing to really stand up for society. Unless you are high class society.

    Politics are sad
    Because at the end of the day, they are just that…

  10. uhhuh says:

    There is no logic in taxing unemployment, isn’t the point of unemployment is to help people get by until they find a job? The weekly payments aren’t even enough as it is and I could only imagine all those people with families especially with children who are barely getting by with their weekly unemployment checks. Here is some help and by the way let me help myself out you are not going to get the complete payout. ON top of that you have to pay sate taxes on it as well. Wow it’s just ridiculous, all these executieves who got help from the bailout in billions of dollars is a huge financial payout, let the little guys in society live why give them such a small help and turn around and take back from the small help!!

  11. Avenger 1 says:

    People who claim unemployment benefits should be taxed are usually people who never have to worry about losing their jobs. They’re either independently wealthy or own their own businesses or they just happen to have been lucky enough to have a relative hire them or they’ve had the same job for 20 years. When you’re actually unlucky enough to have to file a claim for unemployment benefits, you’re not enjoying a free ride. Your job during that time is trying to find work. It’s stressful and it’s like having a cloud hanging over you all the time because you’re know those benefits are for a limited time, usually a shorter time than it will take to find a new job. In an economy like this, having skills can actually be a curse because you’re “overqualified” for just about EVERYTHING, even jobs that you would think would hire ANYBODY. Not true. When you have skills, the first question that comes to mind with a potential employer is “how long will you stay?” A legitimate question to be honest because NOBODY wants to stay forever in a dead end job, so of course you’re going to keep looking for something better, but in the meantime you have to be able to survive. Welfare benefits aren’t taxed and people on welfare have NO intention of bettering themselves. Disability benefits aren’t taxed and people on disability either can’t get off or WON’T get off if they’re scamming the system. So why should someone on unemployment who’s only trying to survive have to pay taxes on those benefits? All they want is a leg-up…not a hand-out. So to anyone who says unemployment benefits should be taxed, I say, UP YOURS! I hope you end up unemployed and facing the option of ending up serving fries for a living or cleaning out toilets. Maybe then you will appreciate how hard just getting by can be. No type of work is beneath me, but why should my actual skills and knowledge go to waste just for the sake of scraping by? If Obama can cut his Treasury Secretary a yard of slack on his PAST DUE taxes, which he NEVER intended to pay, why should I be penalized for trying to actually get back to a job where I can legitimately pay my REGULAR taxes? No sir….being out of work is enough HELL. Having to pay taxes on the paltry amount you receive in unemployment benefits is nothing short of criminal.

  12. rwk2005 says:

    I went from $4000 a month, to unemployment of $1420 a month, house payment $995 a month, truck payment $490 a month, $500 a month ultilitys, and feed a family of 5, oh yeah!!! I have plenty of money to pay taxes with, I recieve unemployment, THE IRS SYSTEM SUCKS, HOW DOES THE IRS (government) EXPECT THE UNEMPLOYED AMERICANS TO RECOVER, WHERES MY BAILOUT, OH THATS RIGHT I RECIEVE UNEMPLOYMENT, DEFAULT ON THE LOANS FOR HOUSE & TRUCK, DESTROY MY KIDS IDEALS OF THIS BEING A GREAT COUNTRY!! I didn’t do anything wrong but work hard & pay my bills, why is my family punished for the greed of so many others who caused the collapse of this once great country. America can police the world, but cant take care of its own people who build the country!!!

  13. Kevin says:

    well it sucks losing your job. now you have to sell your truck so you can make your house payments. rent out your basement to some guy who lost his house so you don’t lose yours. send the kids to grandma and send the wife to work. do what you have to do to survive.

    gross income 1,500 x 12 = $18,000. less standard deduction $11,500, less 3 kids @ $1,000 each = $3,500 x tax rate of 10% = $350 taxes due on unemployment.

    or maybe its the taxes on the $50,000 you already made that you are complaining about….

  14. ffll says:

    To Kevin : I hope you loose your job so you can relate to RWK. I have a masters degree and I am on unemployement and IT SUCKS!!! maybe you can pay my taxes! Because of selfish people like you our economy is this mess…

  15. tsa says:

    Kevin, the standard deduction is not $11,500. It’s somewhere in the $5-6k range. You’re an idiot.

  16. Catherine says:

    I have been laid off for a year now. I am probably one of the few who makes it a full time job looking for a job. My claim just ran out and they have cut my benefits in half. I make just enough to pay my mortgage. The reason for the cut? I found a part time job sorting Hallmark cards to help make up the difference. I feel I am being penalized for working. I had also set up having taxes taken out of my unemployment because of the huge tax bill I would be facing next April. I have had to cease doing that because I can no longer afford to live. It is true that it is very difficult being unemployed. The humiliation of losing your job, not being able to provide for your family.. It is degrading. I have never asked anyone for help in the 35 years I have been working. Yes. I hope to find a job. But not this year. I keep wondering… How did this happen to someone like me.

  17. Jason says:

    Federal income tax should be abolished along with 100’s of other taxes. We escaped the red coats for this very reason, taxing your income and everything, militarizing the streets. Fuck taxes we the people need to stop being we the sheeple! fuck it it’s on, all hail thermal expansion!

    1. Jim says:

      Militarizing the streets, or rather the homes of colonists, was indeed one of the complaints that started the American Revolution. The other complaint was not Taxation, but rather Taxation without Representation. The complaint was that the American colonists were not receiving Representation in government.

    2. Horatio says:

      Jason, that’s just plain wrong. We escaped the redcoats to avoid lack of representation. The slogan was “no taxation without representation”, not “no taxation”.

      Read history, Jason. Read.

  18. David says:

    Paying taxes on unemployment benefits is totally unfair and unethical. People pay taxes toward this cause during their normal employment, so that when and if the situation arises, i.e (lay offs) they will have some sort of financial aid to fall back on. UNEMPLOYMENT BENEFITS ARE JUST THAT, BENEFITS!. It is just
    plain ludicrous and contradictory to imply that this benefit be considered an income. Washington needs to
    re-think and correct it soon, or more homes will be up for foreclosure.

    Angry as hell

  19. Anonymous says:

    benifit is not income

  20. Linda says:

    Unemployment is called Unemployment Insurance, is it not? Since we all pay into it as insurance, since when did they consider it all right to tax insurance?

  21. Diane Davis says:

    I think having to pay taxes on unemployment is Bullshit….. I hate the government and the Dumbasses that think these politicians give a shit about us……

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