Question

W-4 withholding when moving from unemployment benefits to new job

Forum|Forum|4 years ago
September 9, 2021
1 reply
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Hi there-- thanks for your time today!

I've heard that when you start a new job after collecting unemployment (6 months for me) that you should set your withholding elections to 0 to make up for any tax gaps with unemployment benefits.

What's the best W-4 strategy for folks coming off unemployment?

A

AmitaR

I am assuming you're talking about Tax Year 2021 (current year). Looks like you may not have had any tax withheld from your Unemployment Income. Yes, setting your withholding election to 0 is a good idea, this way, you may have enough withholding from your W-2 income that may cover you (depends what your total unemployment income and Total Income for the whole year is). Now is a good time to do a rough estimate for your Total Income for the whole year 2021 and see if you will have enough tax withholdings. If not, you can always change your W-4 form and ask them to withhold additional amounts from your paychecks for the rest of the year.

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