Oregon Tax Consultants Practice Exam 2026 – Complete Study Resource

The inclusion of union unemployment benefits as income is based on the fact that these benefits are typically intended to provide financial support based on an individual’s prior earnings and contributions to the union or unemployment fund. In this context, the correct approach is to consider only the amounts received that exceed the individual's contributions.

When determining what to include as income, it's important to understand the principle of income recognition. Only the amount that is received above what the individual has already contributed reflects an increase in resources available to the taxpayer. The rationale is that contributions represent pre-existing funds put towards the unemployment benefits, while amounts beyond these contributions are effectively a benefit or gain that the individual is realizing.

By including only those benefits that exceed the contributions, the accounting aligns with common income recognition principles where only net gains are typically reported as income for tax purposes. This understanding helps align financial reporting and taxation practices with the concept of realized economic benefit.