Tax Break on Unemployment Benefits

Individuals receiving unemployment benefits in 2009 get a break under the American Recovery and Reinvestment Act of 2009. The first $2400 of unemployment benefits are exempt from taxation, individuals will still have to pay tax on any benefits in excess of this amount. Most individuals receiving unemployment benefits should know that tax is not taken out from benefits they receive. They are to make the election to have taxes taken out themselves or face the consequences of a tax liability when they file their returns.