FAQs About Expanded Unemployment Pandemic Benefits

Recent passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act significantly expanded the amount and availability of unemployment insurance for workers who have lost jobs due to the pandemic. The act also introduced a new program, Pandemic Unemployment Assistance, providing previously ineligible workers with financial assistance. This segment of the workforce incorporates approximately 16 million self-employed, independent contractor, and freelance workers.

How will these expanded benefits affect you if your job is impacted by the coronavirus pandemic? Here are some frequently asked questions (FAQs):

Who now qualifies for unemployment insurance?

You must meet these three qualifications in order to apply for assistance:

  • Unemployed, fully or partially, or otherwise unable to work due to the COVID-19 public health emergency
  • Not eligible for any other state or federal unemployment benefits
  • Not working remotely (telework) or on paid leave.

What about self-employed workers, independent contractors, or “gig” workers?

Unlike traditional unemployment insurance, these workers are now eligible for up to 39 weeks of unemployment assistance through a temporary federal program known as Pandemic Unemployment Assistance. However, workers in these categories may require extra amounts of patience when applying for benefits, since many states appear to be waiting for additional guidance from the federal Department of Labor and/or still trying to adapt their administrative systems to accommodate the expanded benefits.

Keep in mind that you also must be able to substantiate prior income, so if you are claiming due to a reduction in income that you’ve previously not been reporting on an income tax return, applying for unemployment benefits on such income could lead to future issues with income taxes.

How much money will I receive?

Each state has its own formula for determining unemployment benefit amounts based on recent earnings, and this amount will be enhanced with a $600 weekly boost known as Federal Pandemic Unemployment Compensation. In other words, if you qualify for unemployment you’ll receive at least $600 per week, plus whatever you’d qualify for under your state’s typical calculation.

How long do unemployment benefits last?

Most states normally offer up to 26 weeks of unemployment benefits, but the CARES Act has extended this by 13 weeks for a total of 39 weeks.

Do I have to be laid off by my employer to qualify?

Not necessarily. If you can show that you had to stop working due to a COVID-19 related condition and do not have access to paid leave benefits or the ability to telework, you could qualify for benefits. For example:

  • You now must care for your child full time due to daycare or school being closed
  • You or someone in your household is diagnosed with COVID-19/coronavirus
  • You are caring for a family member who has COVID-19.

Federal law also grants additional flexibility for individual states to amend their laws in order to pay unemployment benefits under a variety of scenarios, such as:

  • Your employer closes its doors due to coronavirus, and you are unable to work, but you plan to return to work when your employer re-opens
  • You must leave employment due to a risk of exposure or infection or to care for a family member
  • You are quarantined with an expectation of eventually returning to work.

How do I apply for unemployment benefits?

File a claim with your state unemployment insurance program in the state where you worked.

Are unemployment insurance benefits taxable?

Yes, both “regular” unemployment insurance benefits and the additional $600/week expanded benefit amounts are fully taxable as ordinary income. You must disclose all unemployment benefit amounts received when you file your tax return.

Where can I go for more information?

The Tax Foundation has their own set of FAQs as well here.

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