Unemployment Income

AAA

DEFINITION of 'Unemployment Income'

An insurance benefit that is paid as a result of a taxpayer's inability to find gainful employment. Unemployment income is paid from either a federal or state-sponsored fund. The recipient must meet certain criteria in trying to find a job. Employers and employees are assessed a payroll tax to cover the cost of this benefit.

Also known as "unemployment benefits" or "unemployment compensation".

INVESTOPEDIA EXPLAINS 'Unemployment Income'

Unemployment income is fully taxable as ordinary income. Recipients of this benefit are sent a Form 1099-G at year-end detailing the total amount of benefits received, which they must report on the 1040. Unemployment benefits were first introduced along with Social Security in 1935. Unemployment income is designed to provide subsistence income for a given length of time, giving the unemployed recipient time to find another job.

RELATED TERMS
  1. Trade Adjustment Allowance

    A federal government subsidy paid to individuals who have lost ...
  2. Unemployment Insurance

    A source of income for workers who have lost their jobs through ...
  3. Disability-Income (DI) Insurance

    An insurance product that provides supplementary income in the ...
  4. Taxable Income

    The amount of income that is used to calculate an individual's ...
  5. Ordinary Income

    Income received that is taxed at the highest rates, or ordinary ...
  6. Unemployment Rate

    The percentage of the total labor force that is unemployed but ...
RELATED FAQS
  1. How do government stimuli increase the number of jobs in the private sector?

    The purpose of a government stimulus is to use strategic government spending to revive a stagnant or contracting economy. ... Read Full Answer >>
  2. How can I tell if I'm eligible for an EITC?

    According to the IRS, over 22 million taxpayers received $41.4 billion dollars in earned income tax credit (EITC) for tax ... Read Full Answer >>
  3. I am 52 years old and wish to make a withdrawal from my 401(k) plan. Is there any ...

    Most distributions from qualified retirement plans made to you before you reach the age of 59.5 are subject to an additional ... Read Full Answer >>
  4. What is the criteria for a simple random sample?

    Simple random sampling is the most basic form of sampling and can be a component of more precise, more complex sampling methods. ... Read Full Answer >>
  5. How is money supply used in monetary policy?

    Regulating the money supply is the sole tool of the Federal Reserve's monetary policy. The Federal Reserve can affect the ... Read Full Answer >>
  6. What is the difference between a direct and an indirect distribution channel?

    A direct distribution channel is organized and managed by the firm itself. An indirect distribution channel relies on intermediaries ... Read Full Answer >>
Related Articles
  1. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  2. Options & Futures

    Choosing The Best Disability Insurance

    Social Security benefits can be hard to collect. Find out why you need disability insurance to protect your income, and learn how to choose the right policy for you.
  3. Investing

    Why Some Investors Are Tilting Toward TIPS

    Last month’s five-year TIPS auction drew nearly $48 billion in interest, a sign of recent renewed demand for this inflation indexed asset among investors.
  4. Economics

    What is a Business Model?

    Business model is the term for a company’s plan as to how it will earn revenue.
  5. Economics

    What is the International Monetary Fund?

    The International Monetary Fund fosters global monetary cooperation and sustainable economic growth.
  6. Economics

    What To Expect Following The Tory Triumph

    The decisive Conservative victory in the UK's recent general election removes some of the near-term political uncertainty that many were anticipating.
  7. Economics

    The Pros & Cons of a Trade Deficit

    Is a trade deficit, also known as a current account deficit, beneficial or detrimental to a country's economy?
  8. Economics

    How To Calculate The GDP Of A Country

    We explain how to calculate the GDP of a country using two different approaches.
  9. Economics

    Why The U.S. Economy Is Ready For Liftoff

    Though the U.S. economy is once again underperforming expectations, as it has for the past five years, the economy is ready for a (Fed) interest rate hike.
  10. Economics

    Venezuela: Portrait of a Country in Turmoil

    Venezuela is floundering, and the story has more to do with just the falling price of oil.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center