Steve Worked as a Tech Supervisor for a Computer Company

Steve worked as a tech supervisor for a computer company. In September of 2014, he was laid off. He was paid unemployment compensation for the rest of the year totaling $7,000. Which of the following is true?

A) Steve will have to report all $7,000 of the unemployment compensation as income.
B) Steve will have to report $4,600 of the unemployment compensation as income.
C) Unemployment compensation is never taxable.
D) As long as the unemployment compensation payments are less than the taxpayer's previous salary, they are not taxable.
E) None of the above is true.

Correct Answer:

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