Do I have to pay taxes from unemployment checks?

If you’re receiving unemployment benefits you may have to pay state and federal income taxes in certain locations. However, some states including California, Montana, New Jersey, Pennsylvania, Oregon, and Virginia have waived income taxes on unemployment benefits. In addition, there are seven states that do not impose any state income tax at all. These include Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Know that unemployment distributions are not necessarily “free money” and be aware that you may have to pay more taxes for the following year based on your location and plan accordingly.

To find out more on avoiding a surprise on your tax bills for the following year, click here.