Under the CARES Act, new federally funded unemployment benefits were created. They are:
1. FPUC-federal pandemic unemployment compensation
- This is $600 per week for people already getting normal unemployment
- Coverage started week ending April 4 thru week ending July 25
- The employer will not be charged for this
- No additional application required, it will be added automatically
- This will start April 25 with first payment on April 27
- Will be retro to March 29, beginning of program
- After starting your weekly payment of $600 you will receive a lump sum of the retro payments within 2 weeks.
2. PUA-pandemic unemployment assistance
- Applications will be available April 30 (new portal on unemployment site)
- Coverage for people who are not eligible for regular unemployment
- Self-employed, independent contractors, Gig performers, Peace Corp
- Those who have exhausted regular unemployment, those lacking sufficient work history
- Up to 39 weeks, from February 2 to December 26, 2020
- Will also receive the FPUC $600 weekly for the weeks of April 4-July 25
3. PEUC-pandemic emergency unemployment compensation
- This will be available in the future
- Will allow claimants to claim an additional 13 weeks of UI (not the $600)
- Unemployment due to coronavirus
ALL PAYMENTS (regular unemployment, FPUC, PUA, PEUC) are TAXABLE INCOME! This means that anyone collecting this money will pay taxes on this money. It is considered income so you must report it to any agency or program that you are enrolled in that is based on income. This can seriously affect benefits such as social security retirement and disability, SNAP, fuel assistance, Husky, the State’s health insurance exchange. This is an additional $2400 per month of income.
Employers will not be charged with any of the federally funded payments under the CARES Act but you are charged for any regular unemployment claims, like you normally would.
If someone has applied for regular unemployment and does not want the extra PUA $600 they can go to this DOL webpage and cancel it. If an employee applied and then their company called them back to work, they have to cancel the PUA and return to work. These can be done here: CANCEL CLAIM
Able to work? There has been confusion on this point. You must be physically and mentally able to work full time and be ready to return to work in order to qualify for ANY of these unemployment benefits. So “if you are unable to work because a family member is ill, you are most likely ineligible for UI until you are able to work.” All cases like these are determined on a case-by-case basis. You may apply and a determination will be made concerning your eligibility.
What the Governor waived was the requirement to be ACTIVELY SEARCHING FOR WORK if you were laid off because of the pandemic. You must still be ABLE to work full time.
You are not eligible for unemployment if you are receiving paid sick leave, paid FMLA or some types of severance pay.
If you work full-time and your employer has reduced your pay, but not your hours, you can file for benefits. However, an individual is only eligible to receive unemployment benefits if the individual is totally or partially unemployed. If you are working full-time, unfortunately, you will not be eligible to receive benefits, even if the employer has reduced your pay. If you left your employment due to a substantial reduction in pay, that could be found to be non-disqualifying as the employer unilaterally and adversely changed your conditions of employment. In either case a decision would be determined after a fact finding process.
ARE FUNDS/GRANTS/LOANS CONSIDERED TAXABLE INCOME?
The best advice is to ask this question before you accept any money from any source. You should consult with your accountant or at least call one for advice. We have been asking this question to multiple agencies and professionals. Here is the best information we have, but again, consult your personal accountant because they understand your situation the best.
If you receive a grant because of an emergency, as relief, and it is available to everyone in the distressed class, then it is probably not considered taxable income. If you receive a grant for a project or program where you are creating something or doing something for the money, it is probably considered taxable income. Again, we stress that this is a general guideline. You need to consult your accountant.
So, if you are a struggling actor that gets a grant to “help struggling actors out of work because of the covid” then you may don’t have to pay income tax on it. But if the grant was to “act out the hardships farmers are experiencing because of the covid”, you probably have to pay income tax on it. Also, consider that for the week that you are working on the film, you are employed and you cannot collect unemployment for that period.
The point of this illustration is make everyone think of all aspects of funds you may apply for. Some of you are collecting unemployment, some have strict income restrictions for programs you are eligible for. Make sure you check with all of them to be sure you are making the best decisions for you personally and for your business.
