- When filing for unemployment, remember that each state has its own wage requirements that determine your weekly unemployment payment.
- Under the CARES Act, eligible unemployed workers will receive $600 in addition to their state's maximum unemployment benefits and a 13-week extension on their unemployment pay period.
- To file for unemployment benefits, make sure you have your driver's license, Social Security number and former employer's information on hand.
As the number of coronavirus cases increases, so does the number of out-of-work Americans. This has left millions of people scrambling to file for unemployment. However, many are confused about how to file for these benefits and how much money they are eligible for. Here are the basics on how to file for unemployment, who is eligible for the benefits and how much money you can expect to receive each week.
How do I file an unemployment claim?
You file your unemployment claim through the department of labor of the state where you last worked. Most states offer multiple ways to apply for unemployment, the most common being online and over the phone. However, some states still require you to apply in person.
What do I need to file for unemployment?
Gather the following items and information:
- Your Social Security card
- Your driver's license
- Information about your previous employer, including the company's name and address, your supervisor's name and phone number, and the employer's registration or federal Employer Identification Number (EIN)
- The income you earned at your previous job
- How long you worked for your previous employer
- How often you were paid
- Whether you served in the military
- The reason you're now unemployed or your hours are reduced
If you are not a U.S. citizen, you will also need your Alien Registration Number and possibly your resident alien card or permanent resident card to prove you're authorized to work in the United States.
Once you have all this information, you will either enter it all into an online form, provide it verbally over the phone or present it in person to a state representative.
How long does it take to receive unemployment benefits?
Once you submit your claim, you should expect to wait at least three weeks before hearing whether you were approved. However, since unemployment claims have skyrocketed because of the coronavirus pandemic, it may now take even longer to receive a verdict on your application, said David Bakke, human resource specialist at DollarSanity.
In New York alone, the labor department experienced a 900% increase in web traffic and a 16,000% spike in phone calls between March 23 and March 28. As unemployment rates grow and the department continues to receive more claims than it's used to, applicants are likely to experience delays.
When should I file for unemployment?
Once you've been let go, it's important to take immediate action. File a claim if you've lost your job through no fault of your own. This means you've been laid off or terminated by the company you work for without cause.
"This ensures you're in the system, get approved and can start receiving payments as soon as possible," said Laura Handrick, HR and tech strategy consultant.
Am I eligible for unemployment?
Simply being out of work doesn't entitle you to unemployment benefits. If you were fired because of misconduct or quit your job without good reason, you may not be eligible for unemployment benefits. While each state has its own eligibility requirements, many states consider how much money you earned in your job, how many hours you worked for the year before your unemployment, and the reason you're now jobless.
The federal government has also taken the effects of COVID-19 into consideration. Under the CARES Act, eligibility requirements have changed to accommodate workers who lost their jobs because their employers closed operations due to the virus. People who are isolating and intend to return to work, or who left their jobs to avoid infection or care for loved ones, may also be eligible for unemployment benefits. You may also be able to file if you are a gig worker or freelancer, depending on your state's requirements.
How much money are you eligible to receive for unemployment?
Unemployment benefits aren't designed to replace all of the income you were making, and the amount you are eligible for varies by state. For example, New Jersey offers the highest benefit limit at $713 per week, Missouri's is $320, New York's is $504, Mississippi's is $320, and Louisiana offers the lowest at $247. Some states offer higher amounts for applicants with dependents.
Each state also has its own minimums for earned wages and time worked within a base period, which affects whether you qualify for unemployment benefits. Your base period is determined by the last four or five calendar quarters you worked before filing for unemployment. Within that base period, you take the largest amount of wages you earned in a quarter and divide it by 26.
Remember that under the CARES Act, qualified Americans will receive an extra $600 in addition to their state-given unemployment benefits through July 31.
How long can you receive unemployment benefits?
Unemployment benefits don't last forever. For most states, the maximum time you can receive unemployment checks is typically 26 weeks. In some states, it's even less. However, under the CARES Act, eligible unemployed Americans can receive an extension of 13 weeks. This means that states like Florida and North Carolina, which have unemployment periods of 12 weeks, will now provide unemployment benefits for 25 weeks, and states that offer 26, like New York, will distribute paychecks for 39 weeks.
During the time you collect unemployment benefits, you are usually required to file weekly or monthly claims that report information about your job search. You may be required to apply for a minimum number of jobs each week, and you must report all job offers you receive.
What are the tax implications of unemployment?
Your unemployment insurance is considered taxable income, so you must report it on your federal tax return in the income section.
Taxes are not taken out of unemployment benefits, but when filing your federal and state taxes the following year, you must report the money you received. The IRS will send you Form 1099-G, which includes the taxable unemployment benefits you received in the previous tax year.
"One benefit, however, is not having to pay payroll taxes like Social Security and Medicare on these payments," said Riley Adams, a certified public accountant and owner of Young and the Invested, a personal finance website. "Should you so choose, you may also elect to have taxes withheld from your unemployment benefits when filing for unemployment insurance."