I'm certainly not a authority in tax law but, if Social Security does NOT consider unemployment benefits as income...because it is "not earned", how is it even remotely possible to consider it "income" at all #1, when there is an Exclusion for it on the return from total income in general and #2, but, it is still used to determine whether your Social Security Benefits are taxable, line 6b? This makes absolutely no sense, notwithstanding the "tax law". This typical of IRS "mumbo jumbo". This is typical and why most people want to abolish the IRS!
First, there is one tax return and there is one unemployment exclusion. You just can't pick and choose which schedules you can use it and which you cannot; it should be applied all through the return. As one IRS agent pointed out, it has a "ripple effect" in the return meaning other schedules (and Worksheets) will be affected. If the IRS has given an Exclusion for Unemployment Benefits received, than this exclusion should apply on every schedule or worksheet in the return....PERIOD! An Exclusion for a particular income means "it doesn't exist"; in other words, not only you didn't earn it, we don't recognize that amount on your return at all. Talk about "double speak", I'd like to know the IRS's rationale for penalizing social security filers for income not even recognized by the SSA!
