Many of our readers ask us what the rules are on reporting income while receiving unemployment benefits. It is understandable. The income provided by unemployment benefits does not cover even the basic necessities of many families, especially those with mortgages, credit card debts and several children. Some  feel pressured to increase their income, however slightly, with a part time job they do not report to avoid taxes and a deduction of their unemployment benefits. But do you have to report all earnings to the North Carolina Department of Employment Security?

Yes, you must declare all weekly earnings while you are on unemployment insurance benefits. However, this does not mean it will affect you unemployment benefits, it all depends on how much you earn and your weekly benefit amount. It is not only wages you must declare either. You must also report pensions, if employers from your base period contributed into them. If you are on shared work benefits because you are on less than 60 percent of your customary work load or less than three customarily scheduled workdays, you must also declare any income you receive during the week.

Note you must declare any additional income when you work for it, not when you receive it. This is similar to the tax accrual method many businesses must follow when paying taxes. For instance, if you take on some temporary part time work and work 10 hours at $12, you must declare $120 the week after you work those 10 hours. You must not wait until you have receive the money in hand.

Allowance,

However, as we said above, the fact you declare your income does not mean your benefits will suffer a deduction. The Employment Security Department of North Carolina allows workers to earn up to a certain allowance before deducting money from your benefits. How is this allowance calculated? It is based on the worker’s highest earning quarter during his base period. A worker’s base period includes the first four quarters from the last five quarters since filing for unemployment benefits.

This is how it is calculated. You write down the amount you earned in income during the highest paying quarter of your base period. You divide this amount by 13 and multiply it by 10 percent or 0.1. Round-up the amount to the next whole dollar. This is your maximum allowance before your benefits start to suffer.

For example, if you earned $4,000 during your highest earning quarter, you can earn up to $31 a week before any deductions apply

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