How does being furloughed or laid off affect your taxes and what's the difference?
Both situations have tax implications to keep in mind, including reporting unemployment benefits on your federal income tax return.
Watch this TurboTax tax tip video to learn more about filing your taxes after a furlough vs layoff.
For more tax tips and support, visit turbotax.com.
Being furloughed or laid off can result in different implications for you and your taxes.
A furlough means your hours and pay are temporarily reduced.
This could result in you not working at all for a while, or it could mean you work fewer hours, but you're still an employee of the company and could still continue to receive employee benefits.
A lay-off is a little different.
This means you're no longer employed by the company.
Lay-offs can be temporary or permanent, and you'll normally lose employee benefits.
Now whether you're furloughed or laid off, you could qualify for unemployment if your income drops low enough.
Check your state's unemployment rules to see if you're eligible for unemployment compensation.
And remember to report any unemployment benefits you do receive as taxable income on your 1099-G form.
A lower income also usually means you'll owe less federal income tax.
This could result in a federal tax refund when you file your tax return.
TurboTax is here to support you.
For more tax tips and support, visit turbotax.com.
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