Perhaps you are searching for a new job or are relocating after finding one. Or maybe you tapped into your retirement fund and now wonder about the tax implications. For those out of work, the IRS has resources available to help.
EITC. According to the New Jersey Society of Certified Public Accountants, there are several items included in the tax code, such as the Earned Income Tax Credit, that can help unemployed taxpayers lessen their tax burdens. EITC is a refundable federal income tax credit for low to moderate-income workers and families that offsets the burden of social security taxes and provide an incentive to work.
When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they do not have a filing requirement. Taxpayers can find out if they are eligible for the EITC by answering questions and providing basic income information using the EITC Assistant at www.IRS.gov.
Tax Center. The IRS’ Tax Center to Assist Unemployed Taxpayers offers information on a wide range of tax-related topics covering a change in employment status and the effects of job loss on taxes. The center website, also available through www.IRS.gov, answers frequently asked questions on such topics as severance pay, accumulated leave, vacation and sick pay, unemployment compensation, COBRA insurance, and pensions.
The Tax Center to Assist Unemployed Taxpayers also provides information on free tax assistance, unresolved tax problems, starting your own business, bankruptcy, and mortgage debt forgiveness.