Tag: unemployment benefits

Tax preparers warn unemployment recipients could owe IRS

The Hill logoTax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year.

Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country.

But workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments. People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns. Continue reading.

Yes, most workers can collect more in coronavirus unemployment than they earn – but that doesn’t mean Congress should cut the $600 supplement

Americans who lost their jobs because of the pandemic had been getting a US$600 bump on top of state benefits in their weekly unemployment checks since March. That ended on July 31, and lawmakers are debating whether to extend the program and if so by how much.

Senate Republicans are arguing it’s too generous to the 18 million who are unemployed and serves as a disincentive to returning to work. Their initial proposal in the ongoing negotiations would slash the benefit to $200 a week.

As an empirical economist, I wanted to see if their concerns about the disincentive were valid. So I analyzed data on earnings and unemployment benefits to estimate the share of benefit-eligible workers who could collect more on the dole than on the job. Continue reading.

GOP shifting on unemployment benefits as jobless numbers swell

The Hill logoFaced with staggering unemployment numbers that are likely to remain elevated through the election, Senate Republicans are reversing their positions on ending a federal increase of state unemployment benefits after July.

Senate Majority Leader Mitch McConnell (R-Ky.) vowed in a conference call with House Republicans last month that Senate Republicans would block the $600 weekly boost to state unemployment benefits from the federal government.

Also last month, GOP senators involved in planning for a phase four coronavirus relief bill said there was overwhelming support for entirely ending the federal enhancement of state unemployment benefits. Continue reading.

Fight emerges over unemployment benefits in next relief bill

The Hill logoA recent boost to unemployment benefits is shaping up to be a major flashpoint in negotiations over the next coronavirus relief package.

For weeks, out-of-work Americans have been eligible to receive an extra $600 a week on top of regular jobless benefits from their state. The extra amount was part of the $2.2 trillion pandemic response bill signed into law by President Trump in late March.

Now, Democrats are eager to extend that benefits bump beyond the end of July, when the program is slated to expire. And they’re drawing battle lines ahead of talks between the White House and Congress on another rescue package. Continue reading.

Claims for unemployment benefits spike as coronavirus forces thousands of layoffs

The Hill logoThe number of Americans who applied for unemployment benefits soared last week as businesses shuttered because of the coronavirus pandemic began laying off workers.

Weekly claims for unemployment insurance rose to 281,000 between March 8 and 14, spiking 70,000 from the 211,000 applications for jobless benefits filed between March 1 and 7.

The sharp rise in claims for unemployment insurance comes as businesses in the entertainment, restaurant and bar, travel, retail, and hospitality industries face mandatory closures across the U.S. as the coronavirus pandemic escalates. Continue reading.