Today, we look at The CARES Act in the fourth installment of our week-long series on surviving sudden unemployment
The CARES Act also provides supplemental unemployment compensation. The law provides emergency funding to states to provide an additional $600 a week in payments — on top of regular weekly payments, as long as the individual is eligible to receive at least $1 of underlying benefits for the claimed week — from the time a worker lost his or her job until July 31 as part of the Federal Pandemic Unemployment Compensation (FPUC) benefits. It also funds an additional 13 weeks of unemployment benefits for states, which typically cap unemployment benefits at anywhere between 12 and 30 weeks.
File your claim for benefits as soon as you are able to. Note that you will have to request benefits every week you want payment, even if your application is still pending initial approval. File your claim weekly during your furlough.
Many states have a one-week “waiting period” before claims are eligible. (Georgia, Iowa, Maryland, Michigan, Nevada, New Jersey, Vermont, and Wyoming don’t have a “waiting week.”) At least 35 other states have waived the waiting period for Coronavirus-related unemployment claims, allowing eligibility for benefits immediately.
In addition, at least 27 states have waived the requirement that workers actively search for work in order to be eligible for unemployment compensation.
Although many claims are paid within a few business days, it may take 2-3 weeks for your first unemployment check to arrive (and these days, most claims are paid electronically through direct deposit to your account or to a reloadable prepaid debit card, instead of a physical check).
Under normal circumstances, unemployment insurance program provides benefits to people who:
- have enough employment to establish a claim
- have lost employment through no fault of their own
- Are ready, willing, and able to work
- Are actively seeking work
However, as mentioned previously, the requirements to actively seek work have been waived in many states.
For the “actively seeking work” requirement, if you are unable to work due to the Coronavirus pandemic, as long as you stay in contact with your employer, and are available to return to work when asked, you satisfy the “work search, availability, and capability” requirements. If your current unemployment is not due to the Coronavirus pandemic, you still need to conduct a weekly work search; however, you do not need to accept work offered to you if you are under quarantine or if you have been instructed to stay at home (or are under a statewide stay-at-home order).
One thing you may not have realized is that unemployment benefits count as taxable income on your federal tax return. Unemployment compensation may or may not be taxable in your state. Check with the Department of Labor in your state for information. Most state unemployment applications allow you to choose to have state and/or federal income tax withheld from your payments. Make sure you set aside part of the money for taxes if taxes are not withheld from your payment.
You may be required to make quarterly estimated tax payments if you do not have taxes withheld from your unemployment benefit payments. Check with your tax advisor for advice.
Your new financial situation may make you eligible for other kinds of assistance. For example, the Supplemental Nutrition Assistance Program (SNAP), or “food stamps” are issued by the state based on financial need. Each state has a different application form and process, so contact your state agency directly to apply. During the current public health emergency, some of the existing regulations are being relaxed or suspended, which will make additional people eligible for this benefit.