Don't forget about unemployment benefits at tax time

There's finally some good news to report on the job front. In January, the national unemployment rate dropped to 9.7%, the lowest since August 2009. And the news got even better last week when the Labor Department reported that there were 440,000 initial jobless claims filed in the week ended February 6, down almost 10% from the previous week.

It may be a sign that the economy is on its way to recovery -- but more work is still needed in Washington. It will clearly take some time to climb out of a hole that saw 150,000 jobs lost last December alone.

Last year, the federal government took measures to offer some relief to the more than 4.5 million people still looking for work. The American Recovery and Reinvestment Act (ARRA) included a provision that exempts the first $2,400 in unemployment benefits from federal income tax. In prior years, all unemployment benefits were taxable for income tax purposes at the federal level.