$300 weekly unemployment benefits: Extra payments could be leftover. Everything to know

In addition to $1,400 stimulus checks to qualifying individuals and families, the March stimulus bill included a bigger child tax credit, as well as extensions to the additional $300 unemployment checks. The law also added a $10,200 tax exemption for people receiving unemployment insurance benefits. 

Unemployed individuals can receive a weekly $300 bonus check until Sept. 6. Many states have automatically renewed unemployment insurance benefits, but some recipients may have issues when they reach the benefits year ending, or BYE, date (PDF). States limit benefits to one year, and the money is typically cut off after that date. The American Rescue Plan extends that unemployment insurance, but states require recipients to either file a new claim or an extension. It varies from state to state and those who have been unemployed for a year should get in contact with their state’s labor department. 

Read up on the IRS guidance for how to use the tax exemption for unemployment insurance when you file your taxes (the deadline to file is May 17). The plan lets tax filers who received benefits exempt the first $10,200 of funds, as long as their modified adjusted gross income is less than $150,000. Those who already filed will not have to file an amended tax return. The IRS says it will recalculate and send out tax refunds to those who qualify for one after the exemption is applied, starting in May. Here’s everything you need to know about how the new package will help people who are unemployed. In addition, here’s what to know about President Joe Biden’s next stimulus bill.

How much money you can get under Biden’s plan if you’re unemployed

Biden’s $1.9 trillion COVID-19 relief package extends enhanced unemployment benefits until Sept. 6, for $300 more per week on top of what your state pays. That’s down from the $400 federal bonus proposed in an earlier version of the bill, and down also from the $600 per week extended in the CARES Act.

The period between March 14 and Sept. 6 spans 25 weeks. If the payments were to pick up immediately, that’s $7,500 extra in federal unemployment insurance that you could count on, in addition to your state’s check amount. 

Now playing:
Watch this:

Stimulus check 3: How much money you’ll get

2:32

How the $10,200 tax exemption works

The IRS views unemployment insurance as income. In most cases, the state can withhold taxes like a typical paycheck. However, it’s estimated that 10 million unemployment benefit recipients had no taxes withheld, which would mean they would have a substantial tax bill to pay. To counter that, the COVID relief bill includes a tax exemption of $10,200 for those with an adjusted gross income under $150,000.

The way the exemption works is the first $10,200 of unemployment insurance will not be taxable. If someone received $20,000 of benefits in 2020, they will only be taxed on $9,800 of it.

The IRS gave instructions on how to enter the exemption on tax forms, people who already filed their taxes without the exemption will have their returns recalculated and refund checks will be sent out in May.

Some states will also have a tax exemption on state income taxes, but not all of them. Here are the 13 states not providing a tax break:

• Colorado 
• Georgia 
• Hawaii 
• Idaho
• Kentucky
• Massachusetts 
• Minnesota
• Mississippi
• New York
• North Carolina
• Rhode Island
• South Carolina
• West Virginia

Additional changes to know in Biden’s American Rescue Plan

States have a limit on how many weeks a person can stay on unemployment. Most provide 26 weeks, with some going as low as 12 weeks and others as high as 30 weeks. Considering how long the pandemic has lasted, the federal government extended the number of weeks to 23. Under the new plan, the extension will increase again to 53, which should allow those unemployed for most of the pandemic to continue receiving benefits. 

The extension also applies to Pandemic Unemployment Assistance, or PUA, which is for workers who normally don’t receive unemployment insurance. This includes gig workers, freelancers and those who are self-employed. 

Will the $300 weekly bonus checks be retroactive? 

The unemployment payments do not appear to be retroactive. 

What to know about Mixed Earner Unemployment Compensation and qualifications

The original CARES Act had unemployed workers either get their benefits from the state through unemployment insurance or through a federal program called PUA. Someone who was self-employed or who worked as a gig worker, freelancer or contractor who doesn’t typically receive unemployment benefits after being laid off could receive PUA instead. 

The December stimulus bill added additional compensation for someone who earned a combination of income from a traditional job and employment as a contractor, who would either receive the unemployment insurance payment or the PUA, but not a combination of both. That’s also included in Biden’s American Rescue Plan. 

With Mixed Earner Unemployment Compensation, a person who made more money from self-employment or a contracting job — that requires a 1099 form — could receive an extra $100 a week. For example, let’s say you made $50,000 in 2019, which was split between $30,000 coming from a contractor job and $20,000 from a part-time job at a company. If you were laid off, the state unemployment office would calculate whether you’d receive benefits for the $30,000 via PUA or $20,000 via unemployment insurance but not a combination of the two. 

Though someone who works a traditional job and makes $50,000 a year in New York would receive $480 a week from unemployment insurance, by having a mix of the two you’d get the greater of the two different amounts, which would be the PUA of $288 a week rather than the $280 from unemployment. 

Mixed Earner Unemployment Compensation will now give that person an extra $100, but only if the state participates. It may be some time before states will determine whether they will or not after the bill gets passed. 

What happens after the payments end on Sept. 6? 

Now that the $1.9 trillion COVID-19 relief bill has passed, there will likely not be any discussion of extending benefits until the expiration date nears again in September.

How do I qualify for the $300 bonus checks? 

If you’ve been laid off or furloughed, you’re qualified to apply for unemployment benefits from the state where you live. Once the state approves your claim, you can apply to receive whatever state benefits you’re entitled to. Because states cover 30% to 50% of a person’s wages, there’s no single sum you could expect on a national basis.

Additional qualifications for federal unemployment insurance

Eligibility criteria vary from state to state, but the general rule is that you should apply if you’ve lost your job or been furloughed through no fault of your own. This would include a job lost directly or indirectly because of the pandemic. 

In February, the Department of Labor, as directed by Biden, updated its eligibility requirements to include people who refused to return to work due to unsafe coronavirus standards. Workers qualified for Pandemic Unemployment Assistance when it went into effect at the end of March. 

How your state calculates unemployment benefit amounts

The state determines how much each applicant receives, usually based on an individual’s gross income. It varies from state to state but is typically between $300 and $600. 

How your state handles unemployment money

Most states provide up to 26 weeks of funding, though others, such as Georgia, have limited benefits to 12 weeks, whereas Delaware extended benefits for up to 30 weeks. 

The weekly benefit amount depends on an applicant’s gross income when employed and ranges between $300 and $600, with some exceptions. Mississippi had paid up to $235, while Massachusetts’ maximum has been $1,220. Pandemic Emergency Unemployment Compensation from the CARES Act added 13 weeks funded by the federal government, but another stimulus bill with unemployment insurance would need to pass in order to extend it further. The latest COVID-19 relief package added another 11 weeks of PEUC. 

How to find your state’s unemployment insurance policy details

Each state’s labor office provides information about its particular unemployment benefits.