$2400 exemption... how does this work? (federal, state, employment, taxes)

[branman79]

could someone explain to me what the $2400 dollar works? does it mean that i will get at least 2400 back from my tax return? sorry to be ignorant just wanted to know how it worked and how it actualy helps me.

[Oombahey]

It means that you do not have to pay any federal income taxes on the first $2400 of the unemployment benefits that you have collected. However, you will have to pay federal income taxes on the amount of the unemployment benefits after the inital $2400. Depending on what state you live in, you may also have to pay state income taxes on the whole amount of your unemployment benefits. Btw, I live in NJ and we do not have to pay state income taxes on unemployment benefits...

[OHGreat]

I wish that was the way it was in Michigan but its a no go. Its taxed on both Federal and state here as I have found. If it wasn't I would have broke almost even, But as it stands now I owe $635 total between the both. Only thing that saved me on the state was owning a home. Otherwise I would have tacked on another $579. The home also saved me on Federal to the tune of about $300 as well. So it could have been much worse for me then it is I suppose.