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P1-U10 · PART 1 · SOURCE CYCLE 2026-2027

Other Taxable Income

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Q1.Is unemployment compensation taxable?

Yes. Unemployment compensation generally must be included in gross income.

Q2.When is cancellation of debt generally included in gross income?

canceled debt is generally income to the extent the taxpayer is personally liable and the debt is discharged exclusions may apply for bankruptcy, insolvency, qualified farm indebtedness, qualified real property business indebtedness, and certain student-loan discharges excluded COD may require tax-attribute reduction

Q3.Are unemployment compensation benefits taxable?

yes unemployment compensation is generally included in gross income voluntary withholding may be elected, but taxability does not depend on withholding