 When looking at the income tax formula, we are once again looking at line one, that being income. Remembering that the first half of the income tax formula is in essence an income statement. Although a funny one, we've got income up top, the equivalent of deductions down below to get to the bottom line. Usually net income, but this time taxable income. Our objective being the opposite of a normal income statement, where we're trying to get the taxable income as low as possible. Installation for low income housing. As opposed to net income, we're typically trying to get as high as possible. So we're focused on the income line. So the question is, is this item we're thinking about, in this case, unemployment compensation, something that needs to be included in income, or is it exempt from income? Now unemployment compensation in its name says compensation. So you would think by that term, it might be something that would have to be included in income, but you also might think that this is kind of a welfare or benefit kind of program. So maybe it would kind of beat the purpose to get money from the government, which would then have to be taxed, and then you have to pay it back to the government. However, normally unemployment compensation is generally gonna be a taxable event. Obviously this happens when you're in employment and then you cease employment, and then the state in certain circumstances may be able to compensate you for that unemployment compensation, the general idea of that policy being that a sudden loss of employment can be kind of a shock. Employable or very employable? And you might need some temporary wages in order to find and seek and get employment elsewhere. So it's kind of supposed to help in that kind of transition period. But remember, there's a difference between the federal government and the state's government. So usually unemployment compensation isn't something that makes sense from a federal government standpoint because even if they were to apply that on a federal level, how would they possibly do that in a fair way given the fact that the states have different living conditions and so on through the cost of living itself is already a complicating factor that would make that a difficult situation. Usually those types of things happen on a state and local level, which makes a lot more sense to me to do that kind of thing, of course, at a state and local level. So you have a situation where there's an income from the state that, of course, could be an untaxable kind of event from the federal income tax type of system and that is generally what we have. Okay, so where would it be reported? We've got the line eight other income from schedule one and we've got the schedule one then where we have the unemployment compensation. We'll compensate money up front. Now, the unemployment compensation, you're generally gonna get a form just like you would for any other kind of potential income from if it was the state that gave you the unemployment and that form might be a 1099G type of form. Now, in prior years, due to the whole COVID pandemic type of thing, there was this whole weird thing with the unemployment where they tried to basically say that the unemployment or part of the unemployment is not gonna be includeable in income due to the whole crisis and due to them basically saying the government shutting people down. So obviously it's not your fault if the government shut says you cannot work due to social distancing and so on. So then they tried to say, well, we'll try to give a benefit to people by not having the unemployment they receive as a taxable event, but they kind of put that in a little bit late. So a lot of people still filed with the unemployment in place and then the government was trying to fix it, but that new law was not updated. So now we're back to the normal situation where the unemployment is gonna be included. Now also just note that unemployment for the last couple of years has also been an area where fraud has kind of come into play because we have all this people that are likely unemployed and the fraudsters came in and tried to take advantage to try to receive unemployment compensation for those who possibly didn't file for unemployment but possibly could qualify for the unemployment. So if you do receive like a 1099G, and you didn't get any unemployment, then you're gonna want to address that because somebody probably got paid unemployment and basically stole your identity, which means you've got an issue with regards to the state that they stole your identity and possibly if they could steal your identity there, they might be able to use your social security number and whatnot to file a fraudulent tax return. So you could take action on that. We saw a lot of like tax news last year that was concerned with this type of thing. So just be aware of that.