Unemployment Benefits are Taxable in 2010

One item that did not get extended in this month's tax bill was the exclusion from income of the first $2,400 of unemployment benefits. 

In 2009, taxpayers who received unemployment compensation during the year were not taxed on the first $2,400 of benefits received.  This provision was not extended for 2010, so all unemployment benefits received in 2010 will be taxable.