What to know about unemployment benefits in the new Covid relief package - CNBC

ponjotor.blogspot.com

How much is unemployment boosted?

The relief package adds $300 per week in federal payments on top of the amount you receive from the state.

Workers who lost a W-2 job and earned at least $5,000 in self-employment income in their most recent tax year will be eligible for an extra $100 per week as part of the Mixed Earner Unemployment Compensation provision.

How long does unemployment last?

New unemployment programs created during the pandemic, including Pandemic Unemployment Assistance (for gig worker and those not traditionally eligible), Pandemic Emergency Unemployment Compensation (for the long-term unemployed) and MEUC continue until Sept. 6.

The maximum number of weeks you can draw from PUA will be 79 weeks, or up to 86 weeks in states with high levels of unemployment. The maximum amount of time you can collect PEUC increases to 53 total weeks.

How does the new $10,200 tax waiver work?

A new provision waives federal taxes on the first $10,200 of unemployment benefits you received in 2020. Married couples who file jointly and both collected unemployment insurance benefits in 2020 will have taxes waived on $10,200 per person, or up to $20,400 of UI benefits total.

The waiver applies to individuals and married couples who made less than $150,000 in adjusted gross income in 2020.

States must decide if they will also offer the break on state income taxes. Some like California, Montana, New Jersey, Pennsylvania and Virginia already exempt taxes on unemployment. Seven states — Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming — do not levy any state income taxes.

What if you've already filed your 2020 taxes?

The Internal Revenue Service hasn't issued formal guidance on this yet.

If your return has already been processed and you've received a refund, you'll likely have to file an amended tax return in order to claim the $10,200 exemption, according to The Century Foundation.

If you've filed your return but it hasn't been processed by the IRS, it could be delayed. If you were expecting a refund, that could be delayed as well. However, after factoring in the $10,200 tax waiver, your refund may end up being larger than you originally expected as a result.

If you already withheld or paid taxes on your unemployment benefits throughout the year, you may now be entitled to a refund.

Should I wait to file my taxes in order to claim the waiver?

This ultimately depends on your financial situation, and you may refer to a tax preparer for more details.

Some experts have suggested that if you're able to wait to file your taxes in order to claim the new $10,200 waiver, you may consider doing so until the IRS makes guidance available.

With that said, the relief package also offers $1,400 stimulus checks to individuals who earned less than $75,000 a year and phases out at $80,000. If your 2020 income was lower than your 2019 earnings, you might be inclined to file your taxes sooner rather than later in order to get the latest stimulus check more quickly.

What if your benefit year is ending?

Many people out of work since the beginning of the pandemic are coming up to the end of their 52-week benefit year. Usually, once you reach this point, you have to start a new benefit year and recalculate your payments based on your most recent earnings.

If you're on PEUC and recalculating your benefits would decrease your aid by $25 or more, you can instead continue to receive the same weekly benefit amount for a new 52-week period. After your PEUC expires, at the latest by Sept. 6, you'll still have access to regular unemployment insurance for the remainder of your benefit year.

This rule doesn't apply if you're on PUA or Extended Benefits, the federally funded program that triggers "on" for select states during times of high unemployment. You'll be prompted by your state to start a new benefit year, which could change how much you get every week.

When do the changes go into effect?

Let's block ads! (Why?)

Business - Latest - Google News
March 12, 2021 at 05:04AM
https://ift.tt/3cilwLC

What to know about unemployment benefits in the new Covid relief package - CNBC
Business - Latest - Google News
https://ift.tt/2Rx7A4Y


Bagikan Berita Ini