Unemployment benefits under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act)

January 08, 2021 : H&R Block

Editor’s Note: This article was originally published on April 2, 2020. Get the latest on unemployment relief on our Coronavirus resource center.

In the wake of the coronavirus (COVID-19) health crisis, thousands of businesses have closed or laid off workers, leading to a record-high surge in unemployment claims. As part of the effort to support individuals and families, the government expanded unemployment insurance provisions in March 2020 with a stimulus bill, known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Many of the benefits from the CARES Act legislation have expired. As you review the information below, we’ve called out what has changed.

Who is eligible for unemployment insurance since the CARES Act has passed?

In addition to those who would normally qualify for unemployment, anyone who lost their job or had to leave their job due to coronavirus impacts is potentially eligible.

Specifically, these types of workers can now apply for unemployment, even if you have a limited work history:

  • Full-time employees
  • Part-time employees
  • Some self-employed workers, which may include freelancers, independent contractors or gig workers. Check the rules for your state for the rules regarding these workers.

How much will I get with these unemployment benefits?

With the CARES Act, you’ll receive federal unemployment dollars on top of the base amount that you’d normally receive from the state.

State benefits:

  • All normal unemployment benefits will be extended to 39 weeks
  • No required waiting week, regardless of previous state policies

Federal benefit:

  • An additional $600 per week for four months

To see how this works, let’s look at an example. If your weekly state unemployment payment would have been $333 (the nationwide average in April), you’ll now receive an additional $600 from the federal government as part of the CARES Act unemployment benefits. This means you’d receive $933 weekly and would receive these boosted payments for up to four months.

Update on Dec. 18, 2020: Federal unemployment benefits of $600 for four months expired at the end of July 2020. Additionally, state benefit extensions to 39 weeks end on December 31, 2020. If you apply for unemployment benefits with your state today, the number of weeks you will receive depends on your state’s rules.

How do I apply for unemployment insurance?

You can apply online at your state’s unemployment office website or call their office. To find the information for your state, visit the unemployment benefits finder website sponsored by the U.S. Department of Labor.

When you contact your state’s unemployment office, you’ll usually be asked to self-certify that you’re typically able and available to work. The CARES Act provides states with leeway regarding availability because of:

  • Your being diagnosed with or exposed to COVID-19
  • Your household being impacted
  • Your employer being forced to close due to the virus

What if I was already receiving unemployment insurance?

If you’ve been claiming unemployment for a while and are near the end of the maximum number of weeks from your state, you’ll be able to collect the benefits for the extended timeframe.

How unemployment insurance affects your taxes

Because unemployment benefits are considered income, you’ll need to report them on your 2020 federal and state (as applicable) taxes when you file your return in early 2021. The federal government will issue Form 1099-G, which reports the amounts paid to you.

Important Note: When you apply for unemployment benefits you can request federal income tax withheld. Learn more in our Is Unemployment Taxed? post.

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