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Old 03-27-2016, 09:10 AM
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Unemployment compensation vs layoff incentive pay

Hi, I have a question about the tax consequences of a corporate layoff incentive pay or unemployment compensation. Is there a difference between how the income sources are taxed, are both taxable. Are ERISA cobra health care premiums legitimate personal expenses deductible under itemized deductions. I appreciate any help or references to where I could find information on these subjects when a person is laidoff and how to handle the tax consequences.



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Old 03-27-2016, 02:26 PM
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Hi, I have a question about the tax consequences of a corporate layoff incentive pay or unemployment compensation. Is there a difference between how the income sources are taxed, are both taxable.===========> Unemployment benefits, any amounts received under the unemployment compensation laws of the United States or of a state, are considered taxable income and you must report it on your returnIf you received unemployment compensation during the year, you should receive Form 1099-G, which is a report of income received from a government source, showing the amount you were paid.;however, Supplemental unemployment benefits received from your company are not considered unemployment compensation. But they are fully taxable as wages and are reported on your Form W-2 as income.


Are ERISA cobra health care premiums legitimate personal expenses deductible under itemized deductions. ==========>>correct.your med premiums that you have paid with out of pocket funds are an eligible medical expense itemized deduction entered on Sch A of 1040. However, only your total medical expenses that are greater than 10% of your Adjusted Gross Income can be deducted if you are under the age of 65. For ages 65 and older the AGI limit is 7.5%of AGI. Then the total itemized deductions must be greater than the standard deduction for your filing status to have any tax benefit.



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