Unemployment Income

Unemployment income is an insurance benefit that is paid as a result of a taxpayer’s inability to find gainful employment. Unemployment income is paid from either a federal or state-sponsored fund. The recipient must meet certain criteria in trying to find a job. Employers and employees are assessed a payroll tax to cover the cost of this benefit. Unemployment income is also known as unemployment benefits, unemployment compensation or unemployment insurance. The term is most commonly associated with filing a tax return, where such income must be reported.