COVID-19: Changes in Unemployment Benefits During the Pandemic

If you were getting the special PUA benefits, those ended September 4, 2021. Because you aren’t usually eligible for regular unemployment, your unemployment eligibility has probably ended.

See our fact sheet on Unemployment Insurance for information on the regular rules for unemployment benefits.

Yes, unemployment payments usually count as taxable income for both federal and state income taxes. BUT, a new law passed on March 11, 2021 makes the first $10,200 of unemployment tax-free as long as your household income was less than $150,000. This is only for the money you got in 2020. Check the IRS website for more information.

For regular unemployment payments, you can have taxes “withheld” from your payments. If you do this your payments are lower, but you are less likely to have to pay taxes on your unemployment when you file your taxes.

If you were self-employed or an independent contractor, you get unemployment through the Pandemic Unemployment Assistance (PUA) program. PUA payments are taxable, but you can’t have taxes withheld.

Many people got an extra $600 per week, and later an extra $300 per week. That extra money is taxable.

In early 2022, the unemployment office sends a tax form (IRS Form 1099-G) to your last known address. The form says how much unemployment you got in 2021 and how much was withheld in taxes. You use these numbers when you file your taxes.