Do Capital Gains Affect My Unemployment Benefits?
Losing a job is no fun, and it can put you in serious financial straits. Unemployment benefits provide a cushion to tide people over until they can find new employment, but some types of income may affect your eligibility to receive benefits or could affect the amount you get. However, selling shares of stock or otherwise realizing a capital gain won’t impact your unemployment benefits.
Income and Unemployment Benefits
Eligibility for unemployment benefits is determined in part by your recent income from working. Once you’ve applied for and been approved for benefits, some types of income won’t affect your benefits, but others will. In general, income that comes from sources other than an employer doesn’t affect benefits. Examples include capital gains, interest, dividends and rental income. You may work while receiving benefits, but your earnings will reduce the benefit amount. Pension payments, vacation pay or severance packages can also lower unemployment compensation.
Work Requirements
The criteria for unemployment benefits follow federal guidelines, but they are set at the state level. In general, your eligibility and weekly benefit amount are based on earnings from working during all or part of a base period. In most states, the base period is the first four of the most recent five complete calendar quarters. For example, in Georgia you must have worked in at least two quarters of the base period and made a minimum of $858 in the highest-earning quarter as of 2013. Your overall earnings in the base period must be at least 1.5 times what you made in the highest-earning quarter. Your weekly benefit amount is calculated as a proportion of your earnings during the base period.
Additional Eligibility Requirements
To receive unemployment benefits, you also must be able to work and actively look for a job, and you must be unemployed through no fault of your own. You will have to submit a weekly report to a state agency documenting your job search. But, according to the Nolo legal website, you won’t get benefits if you leave your job voluntarily or your employer fired you for actions that constitute serious misconduct.
Tax Considerations
If you liquidate investments and realize capital gains, these represent taxable income, even though it doesn't affect your unemployment benefits, which also are taxable income. In many states, you have the option of having taxes withheld from unemployment benefits. You may have to file a tax return even if you are jobless and have little or no work income for the entire year.
References
Writer Bio
Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.