3630 , the Middle Class Tax Relief and Job Creation Act, included a provision that would have imposed an income tax on unemployment benefits for high-income individuals. Using a scaled approach, the percentage of unemployment benefits subject to tax would have increased with an individual's Adjusted Gross Income (AGI)—beginning with AGI of $750,000 for a single tax filer and $1.5 million for a married couple filing a joint return. The final version of H.R. It did not, however, include the provision in the House-passed version of the bill that would have restricted unemployment benefit receipt based on income. This report addresses many of the questions that have arisen regarding such proposals, including the potential number of people who would be affected and the potential savings to federal and state governments. It then presents Internal Revenue Service (IRS) data on the distribution of household income and unemployment benefits for two tax years: 2010, when UI receipt was at a recent peak, and 2014, the most recently available data, to shed light on the size of the group potentially affected by such proposals. This requirement is based upon a 1964 U.S. Department of Labor (DOL) decision that precludes states from means-testing to determine UC eligibility. As shown in the table, the amount of unemployment benefit income received by tax filers with AGI of $1 million or more is relatively small. For tax year 2014, however, there were no tax filers with at least $1 million in AGI who received unemployment benefits; therefore, there was $0 in reported unemployment benefit in come for this group. Policy Considerations

This section addresses some of the policy considerations associated with proposals to restrict the payment of UI benefits to those with high incomes. For instance, P.L. A provision in the House-passed bill would have taxed unemployment benefit income at 100% for single tax filers with AGI of $1 million (or for married couples filing a joint return with AGI of $2 million). For example, H.R. 3630 , S. 1931 , and S. 1944 of the 112 th Congress, which are summarized briefly in the " Legislation " section, would have imposed an income tax rate (of up to 100% in the case of H.R. There may be other reasons why an eligible individual may not apply for UI benefits. Alternatively, if a restriction on the payment of UI benefits to certain high-income individuals were administered through the UI system, all applicants for UI benefits would be required to complete additional forms for the purpose of reporting income from various sources. The 112th Congress

H.R. The 113th Congress

S. 18 . 2448 . Like S. 310 and H.R. S.Amdt. 2714 . S. 2097 . 4415 , S. 2148 , S. 2149 , and S. 2532 , Section 106 of H.R. 4970 . 3979 , H.R. The 114th Congress

As of the date of this report, no bills have been introduced in the 114 th Congress to restrict UI receipt based on income.
Under the federal-state Unemployment Insurance (UI) system, there is currently no prohibition on the receipt of UI benefits by high-income unemployed workers. States, which determine many of the eligibility requirements for UI benefits, may not restrict eligibility based on individual or household income.
Recent Congresses, however, have considered proposals to restrict the payment of unemployment benefits to high-income individuals. These proposals define high income in a variety of ways—often prohibiting UI benefits for "millionaires." For instance, in the 112th Congress, the House-passed version of H.R. 3630 (the Middle Class Tax Relief and Job Creation Act) included a provision that would have imposed an income tax on unemployment benefits for high-income individuals. Based on a scaled approach, the tax would have increased to 100% for a single tax filer with Adjusted Gross Income (AGI) of $1 million (or AGI of $2 million for a married couple filing a joint return). The provision, however, was not included in the final version of the legislation that became P.L. 112-96.
Several other bills introduced in the 112th Congress would have restricted unemployment benefit receipt based on income (i.e., they would change the current requirement to provide unemployment benefits to all workers without income restrictions): S. 1944, H.R. 235, and S. 310. A number of bills in the 113th Congress would also have imposed income restrictions for the purposes of UI benefits: S. 18, H.R. 2448, H.R. 3979, H.R. 4415, H.R. 4550, H.R. 4970, S.Amdt. 2714, S. 2097, S. 2148, S. 2149, and S. 2532. As of the date of this report, no bills have been introduced in the 114th Congress to restrict UI receipt based on income.
To inform the ongoing policy debate, this report provides information relevant to proposals that would restrict the payment of unemployment benefits to individuals with high incomes. Three primary areas that may be of interest to lawmakers are addressed: (1) the current U.S. Department of Labor (DOL) opinion on means-testing UI benefits; (2) the potential number of people who would be affected by such proposals; and (3) policy considerations such as the potential savings associated with such proposals, particularly in terms of federal expenditures. The latter two issues are discussed because a small percentage of tax filers who receive unemployment benefit income have an AGI of $1 million or more. For example, in tax year 2010, when UI receipt was at a recent peak, approximately 0.02% of tax filers had an AGI of at least $1 million, based on Internal Revenue Service (IRS) data. In tax year 2014 (most recent data available), however, there were no tax filers with AGI of $1 million who received UI benefits, according to IRS data.