@gvosselman Great question!
As of now, there is no legislation that exempts any amount of unemployment compensation from taxable income as there was in 2020. Barring any new legislation, all of your unemployment income will be taxable at the federal level, and each state has different rules around the taxation of unemployment compensation.
Your business loss, on the federal side, will likely reduce your taxable income, but doesn't interact directly with your unemployment income. Basically, all of your income (and business loss) gets counted up in one big pot, that becomes your "taxable income."
As with unemployment compensation, different states have different rules about business losses and adjustments. You will want to make sure you understand the implications in your state as well.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
