Unemployment insurance question

No one is forcing you. If you are entitled to it, it's yours. Kinda like the people who claim they'll never file to get their social security benefits. If you feel strongly, don't bother claiming it, and enjoy the good feeling. A compromise is to take the money and donate it to your favorite charity. Joe

It's a benefit you earned while working. You are not preventing someone else from getting this insurance should you claim it.

So many people would just take the money and run. In fact, they would take it, and not even consider or remember or KNOW that it is subject to income tax. If your tax bracket is 28% federal, you can see now that you'll net only 72%, unless your state also taxes it; and some do.

So then, if you don't really need it, why not take it anyway, and donate to the tax deductible charity of your choice? In that way your state will be helping your charity fulfil their mission.

ChEAr$, Harlan Lunsford, EA n LA

If they donate to a tax deductible charity they get a deduction for it too, so in that case they can donate more than what they receive in order to truly even out -- like on 12k unemployment you could donate

12k/.75k, assuming you are in the 25% tax bracket (ie. deduction is 25% of 16k = 4k). But one would have to run the numbers through a computer program to see the effective on standard deduction, phaseout, state tax, etc.

But you are ignoring the part of Harlan's message where he pointed out that you pay federal tax on the U.I. -- so the charitable deduction, if any, only cancels that out.

-Mark Bole

I don't know what state you live in, but it might not be as much of a windfall as you think. For example, if you are not available for work for any reason, which includes illness or being out of town, you probably won't qualify for that period of time. Of course, you also have to be actively looking for work and not refusing work, in other words there are definitely strings attached.

If the source of your unease is social stigma, don't worry, plenty of people who are (were) well-paid have no qualms about taking U.I. I can't really think of any other reason not to take it, as others have pointed out you can always do whatever self-less (or selfish) thing you want with the money (after tax, of course).

-Mark Bole

wrote

No. Take the money you are eligible for.

No one is lacking because of your one claim.

Is there "constructive receipt" so that she'd be taxed on the money even if she chooses not to take it?

Seth

No. Constructive receipt has to do with exactly *when* you recognize money that actually belongs to you, not whether or not you were entitled to it in the first place. There is no requirement to receive U.I., nor is there such a thing as "imputed" U.I.

In fact, it would be a no-brainer to disqualify yourself from receiving U.I., just state that you were not looking for work.

-Mark Bole

Yeah, good point, I thought of this after posting. If your state does not tax unemployment compensation but you do manage to get a deduction for charitable contributions, then in that case I suppose you can donate more.