Unemployment Benefits
Key Takeaways
- Workers who lose their jobs can get unemployment benefits to help them while they search for work.
- Most states limit unemployment for workers who lose their job through no fault of their own.
- Unemployment eligibility and weekly benefit payments can vary by state.
- What Are Unemployment Benefits?
- Who Qualifies for Unemployment Benefits?
- How Do You File for Unemployment Benefits?
- When Do You Lose Unemployment Benefits?
- Do Workers Have To Pay for Unemployment Insurance Claims?
- What Happens If You Collect Unemployment Benefits While You Are Working?
- Do You Have to Pay Taxes on Unemployment Benefits?
- Can an Employment Lawyer Help With Unemployment Claims?
A job loss is scary and overwhelming. Unemployment compensation provides a crucial financial lifeline for workers who lose their jobs through no fault of their own. While you search for a new job, unemployment benefits can help you get by without a regular paycheck.
Not all workers are eligible for unemployment benefits. Unemployment laws vary by state. This page provides an overview of workers’ rights and unemployment insurance benefits. For more information about benefit payments in your case, talk to a local unemployment lawyer.
What Are Unemployment Benefits?
The federal government’s unemployment insurance program provides weekly benefits to qualifying unemployed workers while they are temporarily out of work.
While the Social Security Act initially established the unemployment insurance program, each state administers unemployment benefit claims. Unemployment insurance is funded by taxes.
Eligibility and benefits vary from state to state. The weekly benefit amount is typically calculated as a percentage of your income over the prior year.
The length of benefits also varies from state to state. Generally, federal law caps benefits at a maximum of 26 weeks. In times of high unemployment, the 26-week time limit may be extended. Most states extended the length of time people could receive unemployment assistance during the COVID-19 pandemic.
Who Qualifies for Unemployment Benefits?
To qualify for unemployment benefits, you must lose your job through no fault of your own. Most states require you to lose your job involuntarily, such as through a layoff. It can also include a reduction in hours that reduces your income.
Generally, people who quit their jobs or are fired for cause are not eligible. However, your state may cover unemployment if you voluntarily leave for good cause, such as because of a hostile work environment.
You also have to be able to work. If you cannot work because of an injury or disability, you may qualify for disability benefits instead of unemployment benefits. If you suffer a workplace injury, you can get workers’ compensation benefits.
States generally require you to have enough of a work history to qualify. This can be based on the wages you made in the base period of your employment during the previous year.
How Do You File for Unemployment Benefits?
If you are eligible for unemployment benefits, contact your state’s unemployment agency as soon as possible after you lose your job. Your state unemployment agency website should have all of the information that you need to complete your application.
The unemployment office will usually contact your former employer, who can also appeal the granting of benefits.
Unemployment recipients generally have to make regular reports to the state. This includes confirming that you are still unemployed, if you worked, and whether you refused any job offers.
Some states also require unemployed people to register with the state employment office for help finding work. If the state denies your application, you have the right to appeal.
When Do You Lose Unemployment Benefits?
Your unemployment benefits can legally end in one of two ways. The state may stop paying your unemployment benefits if you fail to meet any of the eligibility requirements described above. For example, your benefits may end if you refuse a job offer.
The state may also stop paying your unemployment benefits if you have reached the maximum number of weeks for unemployment benefits.
Do Workers Have To Pay for Unemployment Insurance Claims?
In most states, workers don’t have to pay into unemployment insurance. Only a few states have unemployment taxes for employees.
There are federal and state requirements for how much employers have to pay for unemployment. The unemployment insurance system is funded by employers with a tax on the employee earnings. Under the Federal Unemployment Tax Act (FUTA), the federal government can make loans to states that don’t have enough in their unemployment trust funds to pay claims.
What Happens If You Collect Unemployment Benefits While You Are Working?
Unemployment claimants have to report any employment or reemployment while they are receiving benefits. If you collect income for work while getting benefits, that income will reduce your weekly benefit amounts. This includes part-time, full-time, or self-employment income.
If you are working and fail to report income, the state can collect the overpayment. There are also criminal penalties for unemployment fraud. Depending on state laws, unemployment fraud can be a misdemeanor or a felony.
Do You Have to Pay Taxes on Unemployment Benefits?
It may not seem fair that you have to pay taxes for unemployment, but the IRS considers those benefits as taxable income. You have to report unemployment benefits on your federal income taxes. This is generally reported on a Form 1099-G. Check with your state tax agency to see how your state handles taxes for unemployment.
Can an Employment Lawyer Help With Unemployment Claims?
An employer may wrongly try to deny your unemployment claim. If your state denies your unemployment claim, you can file an appeal. Sometimes it may mean you just need to provide additional information. An unemployment benefits lawyer can help with your claim to make sure you get the benefits you deserve.
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