How is Unemployment Compensation Taxed Under US Tax Law ?

unemployment compensationIn the United States , a worker receives unemployment compensation or  benefits equal to between 40-50% of their previous pay generally . This is on account of Federal Unemployment Tax Act (FUTA), which authorizes the Internal Revenue Service (IRS) to collect an annual federal employer tax. This tax funds the program to compensate  workers who have become unemployed through no fault of their own. As a rule , if anyone receieves  unemployment compensation during the year, he/she  should receive Form 1099-G that shows the amount of unemployement compenation paid to him .

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