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Unemployment benefits: The deal with Biden, jobs, states canceling $300 bonus checks

With a growing number of states looking to cut the $300 federal bonus on unemployment checks, Biden said those who turn down a suitable job will lose benefits. Here's everything you need to know.

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What's happening with the bonus $300 unemployment benefits now?

Sarah Tew/CNET

A growing number of governors are ending the $300 federal unemployment bonus starting in June -- saying the benefit is holding back job growth in their states. In response, President Joe Biden said he will work with states to make sure unemployed workers can find and take jobs: "The law is clear. If you're receiving unemployment benefits and you're offered a suitable job, you can't refuse that job and just keep getting unemployment benefits."

The $300 weekly bonus, on top of what states already pay in unemployment checks, is part of the American Rescue Plan law from March that extends the $300 payments through Sept. 6. However, states can opt out, and so far, the governors of Arkansas, Mississippi, Montana and South Carolina have said they will cancel the benefit in June.

What does that mean for those who participate in the bonus  $300 unemployment checks? We'll tell you everything you need to know now, including how the IRS could refund you up to $10,200 if you were taxed on your unemployment checks as income. (The deadline to file is May 17.) Here's what to know about July's child tax credit checks and stimulus check "plus-up" payments. You may also want to see if the IRS owes you more tax refund money and how you could get $16,000 back in child care expenses like day care. This story has been updated with new information. 

Which states are ending the $300 bonus unemployment payment?

At least nine states so far are canceling the bonus unemployment benefits provided through the American Rescue Plan, with their governors claiming the weekly payments are keeping unemployed workers in their states from taking jobs. "It has become clear to me that we cannot have a full economic recovery until we get the thousands of available jobs in our state filled," Mississippi Gov. Tate Reeves said in a statement on Monday.

That means in June, unemployed workers in these states will not receive the $300 weekly bonus on top of other unemployment money they would receive from each state. Individual states can choose not to participate in the weekly $300 bonus benefit.

The US Chamber of Commerce on May 7 called for an end to the $300 federal bonus. Here are the states that have so far said they were ending bonus payments:

  • Alabama
  • Arkansas
  • Iowa
  • Mississippi
  • Missouri
  • Montana
  • North Dakota
  • South Carolina
  • Tennessee

Biden: Unemployment benefits and 'suitable jobs'

In remarks on Monday, Biden responded to states canceling unemployment benefits and reaffirmed the federal guidelines for receiving the bonus unemployment money. "We're going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits," Biden said Monday. "That's the law."

According to the Department of Labor, if you turn down a suitable job, you can be denied unemployment benefits: "You must be able, ready and willing to accept a suitable job," according to a department FAQ.

According to The New York Times, the Biden administration on Monday requested the Labor Department to work with states to make sure unemployed workers can't continue to draw benefits if they turn down a suitable job offer.

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What is the $10,200 unemployment refund? Do I qualify? 

The IRS views unemployment insurance as income, which means it's subject to taxation. In most cases, the state can withhold taxes like a typical paycheck. However, it's estimated that 10 million unemployment benefit recipients had no taxes withheld, which means they would owe a substantial amount when filing their tax return. 

To counter that, the most recent stimulus law includes a tax exemption of $10,200 (or up to $20,400 for those filing jointly) for those with an adjusted gross income under $150,000 during the 2020 year. How does the exemption in the new legislation work? The first $10,200 of unemployment insurance will not be taxable, so if someone received $20,000 of benefits in 2020, they will only be taxed on $9,800 of it. According to the Treasury Department, some 7.3 million people (PDF) are already eligible to receive unemployment tax refunds.

The IRS has issued instructions on how to enter the exemption on tax forms. People who already filed their taxes this year without the exemption will have their returns automatically recalculated by the IRS. (Those refund checks will start going out in May.) While the IRS has said that taxpayers do not need to file an amended federal tax return to get their tax break, a handful of states are requiring taxpayers to file an amended state tax return to get a state refund. Here's how to find out your state's rules.

Also, keep in mind that some states are not providing a tax break. According to a recent chart by the tax preparation service H&R Block (PDF), 11 states aren't offering the tax break: Colorado, Georgia, Hawaii, Idaho, Kentucky, Minnesota, Mississippi, New York, North Carolina, Rhode Island and South Carolina. Other states, like Indiana and Wisconsin, are offering a partial tax break. 

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For millions of Americans who are still without a job, unemployment insurance is a lifeline.

Sarah Tew/CNET

I receive unemployment benefits. When will I get the extra $300 a week and for how long?

The recent $1.9 trillion COVID-19 relief package extends enhanced unemployment benefits until Labor Day, Sept. 6, with a $300 federal bonus on top of what your state pays. The supplemental benefits were supposed to begin last month, but they may not arrive until later. Once the payments pick up, the extra $300 could potentially allow unemployment recipients to receive a total of up to $7,500 for the 25 weeks spanning from March to September. 

While unemployment rates are lower than they were last year at the start of the pandemic, as of April some 16 million Americans (one in 10 workers) continue to receive some kind of jobless aid. According to the Bureau of Labor Statistics, more than one in four jobless Americans have been without unemployment for over a year. 

In 2020, as part of the CARES Act, those receiving unemployment were eligible for an additional $600 weekly until the end of last July. Weekly bonuses picked up again with last year's December relief package, but for half the amount, $300. It doesn't appear that the renewed $300 weekly bonuses can be applied retroactively. 

Could the federal bonus payments extend beyond Sept. 6? 

It's possible, of course, but much depends on what happens with the economic rebound over the summer. We expect the conversation to continue in Congress as the Sept. 6 deadline approaches.

More things to know about bonus unemployment benefits 

States have a limit on how many weeks a person can stay on unemployment. Most provide 26 weeks, with some granting as few as 12 weeks and others as many as 30 weeks. Before the American Rescue Plan, the federal government had extended pandemic relief benefits to the unemployed an additional 24 weeks. Under the new package, unemployment insurance will be extended through Labor Day 2021, offering a total of 53 weeks of additional benefits. 

The extension of these benefits also applies to PUA, which is assistance to workers who aren't normally eligible for unemployment insurance. PUA covers self-employed individuals, like freelancers or gig workers, as well as independent contractors and part-time workers impacted by the pandemic. 

While many states have automatically renewed unemployment insurance benefits, some recipients may have issues when they reach the benefit year ending date (PDF). States limit benefits to one year, and that compensation is typically cut off after that date. Though the American Rescue Plan extends unemployment insurance, states require recipients to either file a new claim or request an extension. Because it varies from state to state, those who have been unemployed for at least a year should get in contact with their state's labor department. 

What about Mixed Earner Unemployment Compensation and qualifications?

For the first time, the original CARES Act  in early 2020 allowed some self-employed workers to temporarily qualify for unemployment benefits. The December 2020 stimulus bill had added additional compensation for someone earning a mixed income from a traditional job and employment as a contractor, who would either receive the unemployment insurance payment or PUA, but not both. 

With the Mixed Earner Unemployment Compensation program, or MEUC, a person who made substantial income from self-employment or a contracting job could receive an extra $100 a week. The MEUC has been extended with the American Rescue Plan Act until Sept. 6. 

For example, let's say you made $50,000 in 2019, which was split between $30,000 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 still be some time before certain states determine whether or not they will implement the MEUC program.

What are the requirements for receiving unemployment insurance?

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

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 updated its eligibility requirements to include people who refused to return to work due to unsafe coronavirus standards.