Home BUSINESS News What to Know About Unemployment Benefits in $1.9 Trillion Covid-19 Relief Bill

What to Know About Unemployment Benefits in $1.9 Trillion Covid-19 Relief Bill

What to Know About Unemployment Benefits in $1.9 Trillion Covid-19 Relief Bill


Congress is this week expected to approve a $1.9 trillion pandemic-aid package that extends the duration of unemployment benefits available to millions of jobless workers, sending it to President Biden for his expected signature. The plan extends two pandemic-related programs used by nearly 12 million people and lengthens supplemental $300 payments to all laid-off workers receiving unemployment benefits by several months.

Here is what we know about the status of the unemployment-insurance programs under the pending legislation:

Which pandemic-related unemployment programs will continue?

Two pandemic-related programs will continue through Sept. 6. Pandemic Unemployment Assistance is available to the self-employed, gig workers and others not typically eligible for unemployment aid. Pandemic Emergency Unemployment Compensation, another federal program that provided additional payments to people who exhausted other programs, will also be extended. The latter program effectively extends benefits for another 25 weeks.

Both programs, which were established in response to the coronavirus pandemic, were slated to end March 14. They were previously extended in December by an earlier aid package.

Will my benefits increase?

No. Those receiving benefits should continue to do so at the current amount, including the $300 enhancement on top of the state-approved level put in place in late December. An earlier version of the bill called for a $400 enhancement, but the Senate lowered the amount.

If I qualify for regular state unemployment benefits, how much will my unemployment check be under the new law?

Unemployment benefits vary by state. The average weekly benefit paid under regular state programs, before any enhancement, across the U.S. was $318.87 for the 12 months ended in January. The enhancement increases the average weekly benefit across the country to about $619.

Are unemployment benefits taxed?

Typically unemployment benefits are taxed, but the bill would exempt the first $10,200 of 2020 unemployment benefits from income for each spouse on tax returns reporting adjusted gross income under $150,000. Those receiving benefits may have spouses earning income or earned income themselves during other parts of the year.

It isn’t clear how the Internal Revenue Service will handle the change, especially as many people have already filed their 2020 taxes. The bill could also complicate state-tax returns. The plan doesn’t address taxes on benefits paid in 2021, so for now recipients may want to plan on them being taxed.

Will workers receiving pandemic-related benefits see any gaps in weekly payments?

After some unemployment benefits expired in December, some workers experienced a gap in payments. Whether that happens this time depends on how soon lawmakers act and Mr. Biden signs the bill. This week is the last for which benefits are slated to be paid under the law enacted in late December.

If I’m offered a job while receiving unemployment benefits, do I have to take it?

Most people receiving unemployment benefits are required to actively seek employment to be eligible for the payments. However, the Labor Department recently issued guidance saying there are cases when a worker can decline a job and stay on benefits.

That includes when the worksite of the offered job isn’t in compliance with coronavirus health and safety standards and when a school worker, specifically, doesn’t have a “reasonable assurance of continued employment” should schools close because of the pandemic.

It may take time for states, which pay benefits to workers, to implement changes to job-hunting requirements. The Labor Department said the eased requirement won’t reach most workers before the end of March.

Senate Democrats are advancing a $1.9 trillion Covid-19 aid package after making a series of adjustments to it. WSJ’s Gerald F. Seib explains what changes senators are making to the bill and what will likely stay the same. Photo illustration: Ang Li (Originally Published March 4, 2021)

Write to Eric Morath at eric.morath@wsj.com

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