Question

Penelope Summers received certain income benefits in 2019. She received $1,400 of state unemployment insurance benefits, $2,000 from a Federal Unemployment Trust Fund and $3,700 workers’ compensation received for an occupational injury. What amount of the compensation must Penelope include in her income?

Answer 1

Answer:

$3,400

Explanation:

State and federal unemployment insurance benefits are taxable, and they must be included in your AGI = $1,400 + $2,000 = $3,400

Workers' compensation received for an occupational injury are not taxable. Only if you return to work while still receiving compensation will that amount be taxable.