Page 53 - Virtual Currencies

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See Workers' Compensation under Sick- able to take a credit against your tax for the later Persons with disabilities. If you have a disa-
ness and Injury Benefits, earlier.) year instead of deducting the amount repaid. bility, you must include in income compensation
• Trade readjustment allowances under the For information on this, see Repayments, later. you receive for services you perform unless the
Trade Act of 1974. compensation is otherwise excluded. However,
• Unemployment assistance under the Dis- Private unemployment fund. Unemployment you don't include in income the value of goods,
aster Relief and Emergency Assistance benefit payments from a private (nonunion) services, and cash that you receive, not in re-
Act of 1974. fund to which you voluntarily contribute are tax- turn for your services, but for your training and
• Unemployment assistance under the Air- able only if the amounts you receive are more rehabilitation because you have a disability. Ex-
line Deregulation Act of 1978 Program. than your total payments into the fund. Report cludable amounts include payments for trans-
Governmental program. If you contribute the taxable amount on Schedule 1 (Form 1040), portation and attendant care, such as inter-
preter services for the deaf, reader services for
line 8z.
to a governmental unemployment compensa- the blind, and services to help individuals with
tion program and your contributions aren't de- Payments by a union. Benefits paid to you as an intellectual disability do their work.
ductible, amounts you receive under the pro- an unemployed member of a union from regular
gram aren't included as unemployment union dues are included in your income on Disaster relief grants. Don’t include post-dis-
compensation until you recover your contribu- Schedule 1 (Form 1040), line 8z. However, if aster grants received under the Disaster Relief
tions. If you deducted all of your contributions to you contribute to a special union fund and your and Emergency Assistance Act in your income
the program, the entire amount you receive un- payments to the fund aren't deductible, the un- if the grant payments are made to help you
der the program is included in your income. employment benefits you receive from the fund meet necessary expenses or serious needs for
Repayment of unemployment compen- are includible in your income only to the extent medical, dental, housing, personal property,
sation. If you repaid in 2022 unemployment they're more than your contributions. transportation, or funeral expenses. Don’t de-
compensation you received in 2022, subtract duct casualty losses or medical expenses that
the amount you repaid from the total amount Guaranteed annual wage. Payments you re- are specifically reimbursed by these disaster re-
you received and enter the difference on ceive from your employer during periods of un- lief grants. If you have deducted a casualty loss
Schedule 1 (Form 1040), line 7. On the dotted employment, under a union agreement that for the loss of your personal residence and you
line next to your entry, enter “Repaid” and the guarantees you full pay during the year, are tax- later receive a disaster relief grant for the loss of
amount you repaid. If you repaid unemployment able as wages. Include them on line 1a of Form the same residence, you may have to include
compensation in 2022 that you included in your 1040 or 1040-SR. part or all of the grant in your taxable income.
income in an earlier year, you can deduct the State employees. Payments similar to a See Recoveries, earlier. Unemployment assis-
amount repaid on Schedule A (Form 1040), tance payments under the Act are taxable un-
line 16, if you itemize deductions and if the state's unemployment compensation may be employment compensation. See Unemploy-
made by the state to its employees who aren't
amount is more than $3,000. See Repayments, ment compensation under Unemployment
later. covered by the state's unemployment compen- Benefits, earlier.
sation law. Although the payments are fully tax-
Tax withholding. You can choose to have able, don't report them as unemployment com- Disaster relief payments. You can exclude
federal income tax withheld from your unem- pensation. Report these payments on Schedule from income any amount you receive that is a
ployment compensation. To make this choice, 1 (Form 1040), line 8z. qualified disaster relief payment. A qualified dis-
complete Form W-4V and give it to the paying aster relief payment is an amount paid to you:
office. Tax will be withheld at 10% of your pay- Welfare and Other 1. To reimburse or pay reasonable and nec-
ment. Public Assistance Benefits essary personal, family, living, or funeral
If you don't choose to have tax withheld expenses that result from a qualified dis-
! from your unemployment compensa- Don’t include in your income governmental ben- aster;
CAUTION tion, you may be liable for estimated efit payments from a public welfare fund based 2. To reimburse or pay reasonable and nec-
tax. If you don't pay enough tax, either through upon need, such as payments due to blindness. essary expenses incurred for the repair or
withholding or estimated tax, or a combination Payments from a state fund for the victims of rehabilitation of your home or repair or re-
of both, you may have to pay a penalty. For crime shouldn't be included in the victims' in- placement of its contents to the extent it’s
more information, see Pub. 505. comes if they're in the nature of welfare pay- due to a qualified disaster;
ments. Don’t deduct medical expenses that are
Supplemental unemployment benefits. reimbursed by such a fund. You must include in 3. By a person engaged in the furnishing or
Benefits received from an employer-financed your income any welfare payments that are sale of transportation as a common carrier
fund (to which the employees didn't contribute) compensation for services or that are obtained because of the death or personal physical
aren't unemployment compensation. They're fraudulently. injuries incurred as a result of a qualified
taxable as wages and are subject to withholding disaster; or
for income tax. They may be subject to social Work-training program. Payments you re- 4. By a federal, state, or local government, or
security and Medicare taxes. For more informa- ceive from a state welfare agency for taking part agency or instrumentality in connection
tion, see Supplemental Unemployment Benefits in a work-training program aren't included in with a qualified disaster in order to pro-
in section 5 of Pub. 15-A. Report these pay- your income, as long as the payments (exclu- mote the general welfare.
ments on line 1a of Form 1040 or 1040-SR. sive of extra allowances for transportation or
other costs) don't total more than the public wel- You can exclude this amount only to the extent
Repayment of benefits. You may have to fare benefits you would have received other- any expense it pays for isn't paid for by insur-
repay some of your supplemental unemploy- wise. If the payments are more than the welfare ance or otherwise. The exclusion doesn't apply
ment benefits to qualify for trade readjustment benefits you would have received, the entire if you were a participant or conspirator in a ter-
allowances under the Trade Act of 1974. If you amount must be included in your income as wa- rorist action or a representative of one.
repay supplemental unemployment benefits in ges. A qualified disaster is:
the same year you receive them, reduce the to- • A disaster that results from a terrorist or
tal benefits by the amount you repay. If you re- Reemployment Trade Adjustment Assis- military action;
pay the benefits in a later year, you must in- tance (RTAA) payments. Payments you re- • A federally declared disaster; or
clude the full amount of the benefits in your ceive from a state agency under the RTAA must • A disaster that results from an accident in-
income for the year you received them. be included in your income. The state must volving a common carrier, or from any
Deduct the repayment in the later year as an send you Form 1099-G to advise you of the other event, which is determined to be
adjustment to gross income on Form 1040 or amount you should include in income. The catastrophic by the Secretary of the Treas-
1040-SR. Include the repayment on Schedule 1 amount should be reported on Schedule 1 ury or his or her delegate.
(Form 1040), line 24e. If the amount you repay (Form 1040), line 8z.
in a later year is more than $3,000, you may be
Page 30 Publication 525 (2022)