This email is for any faculty member who received unemployment payments under the work-sharing program last year. We wanted to provide you with information about your taxes related to work-sharing.
For the purposes of federal income taxes, any payments you received from the New Jersey unemployment system and federal supplemental unemployment program are considered taxable income. Congress could still pass legislation exempting a portion of unemployment income from federal taxes, as it did for 2020 taxes. We’ll let you know if this happens, but as of now, it hasn’t—so you’ll have to report unemployment payments on your federal income tax form and pay applicable taxes. This IRS web page has more detailed information.
Whether you have to pay state income taxes on unemployment payments depends on the state. New Jersey and Pennsylvania don’t tax income from unemployment; New York does. Check to see whether and how you have to report unemployment income on any state form you fill out.
Some of you had 10 percent of your state payments withheld. Thus, if you were eligible for the $73 maximum weekly payment for a 10 percent furlough, your state payments were $66 a week. But the federal supplemental unemployment system did not have this option, so no money was withheld from those $300-a-week payments.
You should receive a 1099-G form reporting your total income from the two unemployment systems and any money that was withheld from your state payments. You should report this information on your state and federal tax filings.
We wanted to make sure you knew about this issue at the start of the new year as you prepare to file your taxes.
Alan Maass, Communications, Rutgers AAUP-AFT