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$300 bonus unemployment checks: When do checks start and what is tax exemption. What you should know

The $300 weekly bonus will continue. 


Sarah Tew/CNET

The American Rescue Plan signed by President Joe Biden last Thursday is already in effect. Stimulus checks made their way to some qualified Americans’ bank accounts this past weekend with 100 million coming in 10 days according to Biden Monday. Another provision in the plan is the extension of $300 weekly bonus checks and a tax exemption, which workers can use on their tax returns. 

An update from the IRS on Friday provided guidance on how to use the tax exemption for unemployment insurance on your taxes. Biden’s plan let tax filers who received benefits exempt the first $10,200 of funds as long as their modified adjusted gross income is less than $150,000. As for those who already filled out their taxes, the IRS says it’s working on instructions for filing an amended return to receive the exemption

Along with the tax exemption, Biden’s plan continues the $300 weekly bonus checks until Sept. 6. The Department of Labor says it doesn’t expect any lags on payments, but it will be up to state agencies to make sure there isn’t a lapse. 

Here’s everything you need to know about how the new package will help people who are unemployed. 

I’m unemployed. How much money will I get under the plan?

Biden’s $1.9 trillion COVID-19 relief package will extend enhanced unemployment benefits until Sept. 6, for $300 more per week on top of what your state pays. That’s down from the $400 federal bonus proposed in an earlier version of the bill, and down also from the $600 per week extended in the CARES Act.

The period between March 14 and Sept. 6 spans 25 weeks. If the payments were to pick up immediately, that’s $7,500 extra in federal unemployment insurance that you could count on, in addition to your state’s check amount. 

The Department of Labor says it doesn’t expect a lag in benefits, because the bill was signed before previous checks from the previous package expire, on March 14. However, the agency doesn’t know with certainty if unemployed workers will experience a lapse, since that’ll depend on whether state agencies that handle the benefits move things along in a timely manner. 


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How do I file the $10,200 tax exemption?

The IRS views unemployment insurance as income. In most cases, the state will withhold taxes like a typical paycheck. However, it’s estimated that 10 million unemployment benefit recipients had no taxes withheld, which would mean they would have a substantial tax bill to pay. To counter that, the COVID relief bill includes a tax exemption of $10,200 for those with an adjusted gross income less than $150,000.

The way the exemption works is the first $10,200 of unemployment insurance will not be taxable. If someone received $20,000 of benefits in 2020, they will only be taxed on $9,800 of it. 

The IRS gave instructions on how to enter the exemption on tax forms, but it has yet to provide details on how to fill out an amended return for those who already filed their taxes. 

What other changes were in the bill? 

States have a limit on how many weeks a person can stay on unemployment. Most provide 26 weeks, with some going as low as 12 weeks and others as high as 30 weeks. Considering how long the pandemic lasted, the federal government extended the number of weeks to 23. Under the new plan, the extension will increase again to 53, which should allow for those unemployed for most of the pandemic to continue receiving benefits. 

The extension also applies to Pandemic Unemployment Assistance, or PUA, which is for workers who normally don’t receive unemployment insurance. This includes gig workers, freelancers and those who are self-employed. 

Will the $300 bonus check be retroactive? 

The unemployment payments do not appear to be retroactive. 

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For millions of out-of-work Americans, unemployment insurance is a lifeline.


Sarah Tew/CNET

What is Mixed Earner Unemployment Compensation, and do I qualify?

The original CARES Act had unemployed workers either get their benefits from the state through unemployment insurance or through a federal program called PUA. Someone who was self-employed or who worked as a gig worker, freelancer or contractor who doesn’t typically receive unemployment benefits after being laid off could receive PUA instead. 

The December stimulus bill added additional compensation for someone who earned a combination of income from a traditional job and employment as a contractor, who would either receive the unemployment insurance payment or the PUA, but not a combination of both. It’s also included in Biden’s American Rescue Plan. 

With Mixed Earner Unemployment Compensation, a person who made more money from self-employment or a contracting job — that requires a 1099 form — could receive an extra $100 a week. For example, let’s say you made $50,000 in 2019, which was split with $30,000 coming from a contractor job and $20,000 from a part-time job at a company. If you were laid off, the state unemployment office would calculate whether you’d receive benefits for the $30,000 via PUA or $20,000 via unemployment insurance but not a combination of the two. 

Though someone who works a traditional job and makes $50,000 a year in New York would receive $480 a week from unemployment insurance, by having a mix of the two, you’d get the greater of the two different amounts, which would be the PUA of $288 a week rather than the $280 from unemployment. 

Mixed Earner Unemployment Compensation will now give that person an extra $100, but only if the state participates. It may be some time before states will determine whether they will or not after the bill gets passed. 

What will happen after Sept. 6? 

Now that the $1.9 trillion COVID-19 relief bill has passed, there will likely not be any discussion of extending benefits until the expiration date nears again in September.

What are the qualifications to receive the $300 bonus payments? 

If you’ve been laid off or furloughed, you’re qualified to apply for unemployment benefits from the state where you live. Once the state approves your claim, you can apply to receive whatever state benefits you’re entitled to. Because states cover 30% to 50% of a person’s wages, there’s no single sum you could expect on a national basis.  

Do I qualify for the additional federal unemployment insurance?

Eligibility criteria vary from state to state, but the general rule is that you should apply if you’ve lost your job or been furloughed through no fault of your own. This would include a job lost directly or indirectly because of the pandemic

In February, the Department of Labor, as directed by Biden, updated its eligibility requirements to include people who refused to return to work due to unsafe coronavirus standards. Workers will qualify for Pandemic Unemployment Assistance when it goes into effect by the end of March. 

How does my state calculate unemployment benefit amounts?

The state determines how much each applicant receives, usually based on an individual’s gross income. It varies from state to state but is typically between $300 and $600. 

How do states handle unemployment payments?

Most states provide up to 26 weeks of funding, though others, such as Georgia, have limited benefits to 12 weeks. On the other hand, Delaware extended benefits for up to 30 weeks. 

The weekly benefit amount depends on an applicant’s gross income when employed and ranges between $300 and $600, with some exceptions. Mississippi had paid up to $235, while Massachusetts’ maximum has been $1,220. Pandemic Emergency Unemployment Compensation from the CARES Act added an additional 13 weeks funded by the federal government, but another stimulus bill with unemployment insurance would need to pass in order to extend it further. The latest COVID-19 relief package would add another 11 weeks of PEUC. 

How can I see my state’s unemployment insurance policy?

Each state’s labor office provides information about its particular unemployment benefits.

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