Unemployment insurance (UI) is administered and funded in part through state and federal payroll taxes. Benefits are awarded based on earnings over an extended base period and typically extend up to 26 weeks in most states.

To keep receiving benefits, you must request them each week through your state website or system and meet eligibility criteria. Learn more about these requirements in your state here.

Basic program

Unemployment benefits are designed to assist jobless workers in covering the costs associated with searching for new work. Each week’s benefit is calculated based on wages earned during a “Base Period,” typically one year or four calendar quarters; and is followed up with the Monetary Determination, which determines eligibility.

UI provides vital stability to jobless families and communities during economic downturns by providing partial wage replacement for those in need, increasing consumer spending, and helping the overall economy regain momentum. Unfortunately, cutting benefits short could push unemployed workers into jobs that do not match their skills or cause them to leave their communities altogether.

Laws that link unemployment benefit duration with unemployment rates in each state can be especially damaging to jobless workers in these regions with high-unemployment or who experience discrimination at work, compounding structural inequities experienced by people of color and low-wage workers.

Extended benefits

State governments can access federal funds during periods of high unemployment to provide an extra week or more of unemployment insurance benefits to workers who have used up their regular allotments, known as Extended Benefits (EB). This funding mechanism is shared equally between state and federal governments.

Unemployment benefits are meant to provide essential relief while individuals search for work, but they also serve a crucial economic function: stimulating demand and expanding employment during recessions or early recoveries. This is especially evident when unemployment benefits are provided in areas and industries hardest hit by slowdowns.

Check with the state unemployment insurance agency in your area to see if a program is available. In order to qualify, all regular UI benefits have been exhausted as well as meeting all work-search requirements in your state. It may be beneficial to speak with an employment law expert in order to help navigate the system more easily.

Requirements

State laws contain specific criteria to determine who qualifies for unemployment benefits, including being both able and willing to work, earning enough during an income base period to qualify, and being based in their highest paid quarter of base period earnings. A formula will then calculate how much money each week you can receive; typically based on this calculation.

Once you file your claim with the Department, they will review it and issue what’s known as a “Monetary Determination,” which details whether you qualify for benefits and if so how much weekly money can be expected to come your way.

To remain eligible for unemployment benefits, you must file a weekly certification detailing your work search activities – this can be completed either online, via mail or Tele-Serve. Furthermore, IDES requires participants to attend any reemployment services offered and you may voluntarily elect for your Federal and/or State income taxes to be deducted from benefit payments.

Taxes

Unemployment benefits are taxed at both the federal and state levels, so you should include them on your taxes. Form 1099-G shows how much was withheld from your unemployment benefits to pay federal and state income taxes; some states like California, New Jersey, Pennsylvania and Virginia don’t levy an unemployment compensation tax but most do.

If filing jointly, up to $10,200 of your benefits are exempt from federal income taxes; thereafter they’re treated like earned wages according to the Congressional Research Service.

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State Senator Simcha Felder introduced legislation this year that would exempt up to $10,200 of unemployment compensation from taxes; unfortunately it failed. His office informed New York Focus that federal guidance pertaining to waiving these taxes remained ambiguous. For more information about your tax liabilities contact your state workforce agency directly, or file an appeal against its determinations if applicable.