Your Quick Guide to Unemployment Income: Benefits, Eligibility, and More

In the wake of the COVID-19 pandemic, many Americans are losing their jobs. And as a result, many Americans now must figure out how to support their families. Fortunately, there are a number of benefits available to workers who lose their jobs in the United States. And one of these is unemployment income. 

If you’ve lost your job and need health insurance, click here to see health insurance plans and prices (most can find a plan for under $50/month) or enter your zip code below.

What is Unemployment Insurance?

Sometimes referred to as unemployment benefits, unemployment insurance is a joint program between the federal government and the states that provides temporary payments to workers who have lost their jobs through no fault of their own. 

Unemployment benefit payments are designed to help partially replace lost wages. The amount you are able to collect in benefits will depend on the salary in the job you lost. Each state uses its own formula to calculate unemployment benefit amounts. Because of this, there is some variance in what time periods and wage rates are used. All states, though, will look at your wages while employed to calculate your unemployment benefits amount. And all states will also determine a maximum amount of unemployment benefits you can collect each week. In some states, you may be eligible for additional benefits if you also have dependents. 

Are unemployment benefits taxable income?

Yes, the IRS considers unemployment benefits to be taxable income. Because of this, you may opt to have up to 10% of your total benefit amount withheld for federal income taxes from your unemployment benefits. You'll need to report your unemployment compensation on your tax return. And you'll receive tax Form 1099-G to file with your taxes.

Can I get unemployment benefits if I’m also earning other income at the same time?

Earning any other income while you’re also receiving unemployment benefits? Then this may reduce the amount of unemployment benefits you receive. And if you make any money through any kind of temporary, short-term work, you will need to report any earnings to your state’s unemployment agency. The state agency may need to make an adjustment to your weekly benefits based on any short-term money earned. 

Keep in mind that if you find a new job, this will make you ineligible to continue receiving unemployment benefits. 

In most states, you can collect both full unemployment benefits and social security.

How do I qualify for unemployment benefits?

First, know that as a result of the COVID-19 epidemic, the federal government has made three major changes thus far regarding unemployment benefits. These changes all allow more people to qualify for unemployment as more and more Americans lose their jobs as a result of the coronavirus outbreak. 

Now, the federal government has said that states may grant unemployment to workers during the pandemic based on the following three scenarios, as well as the previous qualifiers:

1. A business has to temporarily shut down as a result of COVID-19, and thus employees may no longer come into work
2. An employee is quarantined due to contracting COVID-19 or potential COVID-19 exposure, and plans to return to work afterwards
3. Any employee needs to leave work due to risk of exposure or infection, or to care for a family member who has contracted COVID-

Many individual state unemployment agencies are also issuing their own new regulations regarding the expansion of unemployment benefits during the coronavirus pandemic. Check with your state’s office for information on qualifications where you live. 

How do I apply for unemployment benefits?

Contact your state’s unemployment insurance program as soon as possible after becoming unemployed. You should also do so as soon as you meet one of the new COVID-19 qualifications. You will need to file with the state where you worked, even if you live in a different state now. 

When you file an unemployment insurance claim with the state, you will be asked for certain information to verify your employment. This is typically straightforward information like the addresses of your former workplaces and dates of employment. Be sure to give complete and accurate information to ensure your claim is processed quickly!

You will typically receive your first unemployment benefits check two to three weeks after completing an unemployment claim once approved. 

You can find out more about how to apply for unemployment insurance in your state here. 

For how long can I collect unemployment benefits?

Normally, unemployment benefits are available for up to 26 weeks in most states. 

As a result of the COVID-19 pandemic, there have been some exceptions made to this policy, and new legislation in the works to further extend the unemployment insurance period. You are best to check with your state unemployment agency to find out details pertaining to where you are. 

What other programs could I be eligible for?

Learn more about:

• 10 government programs for low income families
• SNAP (a nutrition assistance program sometimes called food stamps)
• WIC (a nutrition assistance program for women, infants, and children)
• Medicaid (free or very low-cost health insurance)

You can also see if you’re eligible for Medicaid or a subsidized Marketplace health insurance plan by entering your zip code below.