Recent speech-LLMs have shown impressive performance in tasks like transcription and translation, yet they remain limited in understanding the paralinguistic aspects of speech crucial for social and emotional intelligence. We propose CP-Bench, a benchmark for evaluating speech-LLMs on contextual paralinguistic reasoning the integration of verbal content with non-verbal cues like emotion and prosody. The benchmark includes two curated question answering (QA) datasets requiring both linguistic and empathetic understanding. We evaluate state-of-the-art speech-LLMs from both open and closed-source models and perform a comprehensive analysis across different question types. The top two models were further analyzed under temperature tuning to understand its effect on this task. Our benchmark reveals a key gap in existing evaluations and offers insights into building more context-aware and emotionally intelligent speech-capable LLMs.

Audio Large Language Models (AudioLLMs) have achieved strong results in semantic tasks like speech recognition and translation, but remain limited in modeling paralinguistic cues such as emotion. Existing approaches often treat emotion understanding as a classification problem, offering little insight into the underlying rationale behind predictions. In this work, we explore emotion reasoning, a strategy that leverages the generative capabilities of AudioLLMs to enhance emotion recognition by producing semantically aligned, evidence-grounded explanations. To support this in multitask AudioLLMs, we introduce a unified framework combining reasoning-augmented data supervision, dual-encoder architecture, and task-alternating training. This approach enables AudioLLMs to effectively learn different tasks while incorporating emotional reasoning. Experiments on IEMOCAP and MELD show that our approach not only improves emotion prediction accuracy but also enhances the coherence and evidential grounding of the generated responses. Experiments on two out-of-domain datasets demonstrate the generalization capabilities of the resulting model.