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Does severance pay count as earned income in determining unemployment compensation in Pennsylvania?
If the amount is reported on the W-2 form in box 1 yes.
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Can you contribute to a Roth IRA if you accept unemployment compensation when your income for the year is in severance and vacation pay?
Yes, that income is all the same as "working" income...vac pay and severance in particular...just paying you for services performed already. Why you would pick a Ro…th I'm not certain...it really only makes sense if your income from that is so much lower than normal that your tax rate is also much lower than normal. Check the link for more info on IRA qualifications...if you were covered by a 401k this year at the job, you may have some other problems. Best of luck...and congratualtions for being wise enough to think ahead, even with the hopefully short term challanges of work...too many actually make terrible choices - like cashing in 401k and such right now (causing bad tax consequences...and sacraficing the future).
It is the US Department of Labor, and the states basically determine the terms of qualifying income. In almost all cases only earned income, not government benefits, qualify a…s income for benefit purposes, so the answer would be No.
no its not
Yes, you can still collect unemployment benefits after receiving severance pay. These 2 benefits are separate and distinct from the other -- severance pay is the considerati…on given by the employer after the employee's dismissal or termination from employment either as a reward for the service or in exchange for waiving his right to sue the employer. Some severance packages actually include the benefit of uncontested unemployment benefits.
The fact that you received severance pay, in itself, does not make you eligible for unemployment benefits. There are many reasons a person receives severance, including volunt…arily leaving a job, so that is not a determinant.
Unemployment benefits is considered unearned income. You get the benefits based on earned income. Since you are not working, it is not earned income.
Yes, it can. However, it cannot help you, only hurt you. First of all, for 2009, the first $2,400 of unemployment compensation is not taxable, so it doesn't affect your taxes …in any way. Above $2,400, it is taxable and increases your AGI (adjusted gross income). The earned income credit (EIC) phases in at 40% of earned income until it reaches the maximum credit. (See the IRS link below for specific amounts.) Unemployment compensation does not count as earned income, so it does not increase your credit. After you max out the credit, it starts to phase out as your income increases. The income amount used here the greater of your earned income or your AGI. Therefore, if your AGI is made up only of earned income and unemployment compensation, your EIC will be reduced because of your unemployment compensation. There are many other items than can increase or decrease your AGI, including interest income, IRA contributions or withdrawals, student loan interest, and many more. So you could potentially offset the unemployment compensation with other deductions from AGI, such as contributing to an IRA. (Of course, you probably don't have the cash for that if you're collecting unemployment.) Here is a link to the EIC figures for 2009 (at the bottom of the page): http://www.irs.gov/individuals/article/0,,id=150513,00.html ***** Unemployment does NOT count towards your EIC because it is not EARNED. Your UC is applicable to federal taxes only. The IRS EIC calculator takes UC into consideration although it is not correct.
The simple answer is no. This was taken directly from the Social Security Website... "After you retire, you may receive payments for work you did before you started getting …Social Security benefits. Usually, those payments will not affect your Social Security benefit if they are for work done before you retired. This fact sheet describes some of the more common types of special payments, helps you to decide if you received any and tells you what steps to take if you did. What qualifies as special payments...If you worked for wages, income received after retirement counts as a special payment if the last thing you did to earn the payment was completed before you stopped working. Some special payments to employees include bonuses, accumulated vacation or sick pay, severance pay, back pay, standby pay, sales commissions and retirement payments or deferred compensation reported on a W-2 form for one year, but earned in a previous year. These amounts may be shown on your W-2 in the box labeled "Nonqualified Plan."
no it dose not, its is concidered a non taxable income, much like social security disabilty income
In the US, the employer pays a payroll tax to the state, which in turn pays unemployment benefits to workers who qualify In Canada this is funded by the working people of Cana…da through their mandatory contributions.
Yes, you can collect after the severance pay ends. Refer to the Related link below under %65.102 "Application of the deductions - (k). The deductions also only occur from the …benefits in the week actually received.
Employers pay a percentage of the first $8000 of an employee's pay. The percentage is based on the company's claims record and on the state's record of employment, depending o…n the unemployment rate. The state tends to run out of money when unemployment is high and so the federal government forces the state to pay a surcharge.
Yes, unemployment IS income
The IRS says no. See the Related Link below for more information.