Taxes on Unemployment Benefits: Oklahoma
It has been a long year and a half since COVID-19 turned the world we knew upside down. Many states chose to shut down in the early moments of the pandemic, resulting in thousands of Americans without income streams. Those same Americans flocked to unemployment services in droves. Unfortunately, the unemployment commission was not prepared for the large influx of people applying for services, leading to long stretches of time on hold, website crashes, and technical glitches. As the year progressed, many began to adapt to the normalcy of our new reality; people began to receive their unemployment payments, searching for jobs, and picking up where we all left off.
Now, we are into the second quarter of 2021 and in the midst of the strangest tax season to ever come about. As the tax deadline quickly comes to the centerfold, there may still be some confusion about filing your unemployment benefits. Not to worry! Kiplinger.com wrote an informative article describing a state-by-state case on the process of discovering if your state taxes unemployment benefits. The article features all fifty states, but for our office location and that of the majority of our clientele, we will go over Oklahoma’s unemployment benefit procedures. According to Kiplinger.com:
Oklahoma Taxes on Unemployment Benefits
Oklahoma taxes unemployment benefits to the same extent they are taxed on your federal return. As a result, the state adopts the federal exemption for up to $10,200 of unemployment compensation received in 2020. If you filed your Oklahoma tax return before March 15, 2021, you don’t need to do anything. The Oklahoma Tax Commission will automatically update your adjusted gross income (AGI). If you are then entitled to a refund, the state will automatically send your a payment. If you filed your Oklahoma return after March 15, 2021, and didn’t report the unemployment exemption on your federal return, you will need to file an amended Oklahoma return using Form 511X and include an estimated federal Form 1040 and Schedule 1 showing the re-computation of your AGI.
State Income Tax Range: Low: 0.5% (on up to $1,000 of taxable income for single filers and up to $2,000 for married joint filers). High: 5% (on taxable income over $7,200 for single filers and over $12,200 for married joint filers).
Sales Tax: 4.5% state levy. Localities can add as much as 7%, and the average combined rate is 8.95%, according to the Tax Foundation.
Property Tax: In Oklahoma, the median property tax rate is $869 per $100,000 of assessed home value.
NextGen has you Covered
Even though this is the most unprecedented tax season, we here at NextGen are here to help the best way we can. Our tax strategists have the ability to make sense of any stack of papers, confusing transactions, and unknown amounts; our team is well prepared to handle whatever is thrown their way. Whether it be bookkeeping or tax strategy, NextGen has you covered. Give us a call and let us help you take charge of your finances!
Click here to find out your state’s tax situation on unemployment benefits!
Credit: https://www.kiplinger.com/taxes/state-tax/602307/taxes-on-unemployment-benefits-a-state-by-state-guide