A third stimulus bill, called the American Rescue Plan, was officially signed into law on March 11, 2021. While it includes less money for weekly additional unemployment benefits, there is a bigger tax benefit for recipients. Here’s everything you need to know about the latest changes to unemployment benefits. If you need help with navigating unemployment, visit the Jobcase Unemployment Resource Center.
The $1.9 trillion plan continues federally enhanced unemployment at $300 per week until September 6, 2021. This differs from the original proposal of a $400 weekly UI boost that extended aid until the end of September. While the signed bill is lower than the House’s proposal, it does include a new tax break.
PEUC has been extended until the week ending September 4, 2021, increasing the maximum span of benefits from 24 to 53 weeks. PEUC provides additional unemployment benefits to individuals who have previously exhausted state or federal unemployment compensation benefits.
The PUA program, implemented for those who don’t typically qualify for regular unemployment like gig workers, freelancers, and independent contractors, has been extended another 25 weeks. It begins the benefit week ending March 20, 2021, and extends until September 5, 2021, this extends the maximum duration of PUA benefits from 50 weeks to 79 weeks.
By law, payments received by unemployment are taxable and must be claimed on your federal income tax return. However, with the new stimulus bill, up to $10,200 in last year’s unemployment benefits could be exempt from taxes if your adjusted gross income (AGI) is less than $150,000 according to the IRS.
For example, if an individual earned less than $150,000 in 2020, and received $25,000 of UI benefits, they will only be taxed on $14,800.
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