Tax Benefits: Life Events - Unemployment - Other Benefits
 | Provided By Balmer Professional Services Various other tax benefits may be available for unemployed taxpayers. Education Credits and Deduction. If you decide that you need to go back to school to retrain for a new job, you may be allowed to take the American opportunity tax credit or the lifetime learning credit. These credits are available for qualifying tuition and related expenses incurred by students pursuing a higher education degree. The American opportunity tax credit is a partially refundable credit. A deduction for tuition and fees incurred may also be available and in some circumstances may be more beneficial than the credits. Mortgage Relief Act of 2007. If you had a debt cancelled because of a foreclosure or mortgage restructuring, you may not need to include the cancelled debt in income. Under this Act, if the debt is considered qualified principal residence debt, you may exclude from gross income up to $2 million of cancelled debt. This law currently applies through 2012. Earned Income Credit. If you were laid off in 2011, you will likely have reduced earned income. This may qualify you for the earned income credit, which is a refundable tax credit for low-income workers. However, it is important to remember that you must have some earned income and unemployment compensation is not considered to be earned income. |
Making Work Pay Credit. In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act of 2009 provided a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns. Most wage earners benefited from larger paychecks in 2009 and 2010 as a result of the changes made to the federal income tax withholding tables to implement the Making Work Pay tax credit. As of Dec 31, this credit has expired and is no longer available to any taypayer.
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