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Travel nurses consider unemployment benefits between assignments

Because of slowed growth in the healthcare industry resulting from hospitals pulling back financially and patients postponing elective procedures, most agencies have fewer travel contracts available. Some travelers are finding themselves in an unusual situation—unable to find a palatable contract. Recent changes in unemployment benefits might make this option appropriate while waiting for the next assignment.

In response to the current financial crisis, the federal government began offering extended benefits last year. In July, the legislature added 13 weeks of "extended coverage" after the state benefit expires. In November, it added another seven weeks, as well as an additional 13 weeks for states experiencing "high" unemployment, bringing the maximum possible extended benefit to 33 weeks. Check through the Department of Labor at to see if your home state is eligible. Under "Weekly Claims," select "Extended Benefits Trigger Notice."

Unemployment benefits are taxable and withholding is optional, not mandatory. In addition, the amount of benefit received is added to the rest of your income for the year, resulting in a higher tax bracket. For most travelers, this would mean federal tax would be 25 percent, plus your home state tax rate. At the end of the year, report the total benefit paid on form 1099-G (the same form used to report your state income tax refund).

In addition, the American Recovery and Reinvestment Act of 2009 made the first $2,400 of unemployment benefit received federal-tax free for 2009. If possible, start having tax withheld after the first $2,400 of benefit received.

Dan Kobaly, EA, a tax adviser and enrolled agent, is the founder of, based in Morongo Valley, California.

The preceding discussion is general in nature and should not be considered advice for any individual tax situation. You should consult with your personal tax planning professional for specific guidance relating to your unique circumstances.

Any tax advice contained herein is not intended to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

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