As of November 2020, the U.S. Bureau of Labor Statistics, reported that many Americans – roughly 10.7 million that is – were unemployed. This means millions of Americans were set to lose unemployment benefits if the second coronavirus relief package was not signed into law.
On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed into law, expanding unemployment benefits and providing relief through multiple measures. Some of which were already put into place under the CARES Act, as well as a second round of direct stimulus payments to individuals and families. The expanded unemployment and second round of stimulus payments under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 means continued assistance for many unemployed Americans in need.
You may be wondering what the second coronavirus relief package means for the unemployed. Don’t worry, TurboTax is here to help. Here is a breakdown of what the second coronavirus relief package means for you if you are unemployed.
How much are unemployment benefits under the second coronavirus relief package?
This bill will extend unemployment benefits by issuing $300 a week for 11 weeks until March 14, 2021.
How long will the extended unemployment benefits last?
The extension gives an additional 11 weeks of Federal unemployment benefits until March 14th, 2021. But if you haven’t maxed out your benefits then the extension could continue until April 5th, 2021.
Do I qualify for unemployment benefits if I earned income as a freelancer or side gig worker?
The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 extends the Pandemic Unemployment Assistance (PUA), which expands unemployment to those who are not usually eligible for regular unemployment insurance benefits. This means that self-employed, freelancers, and side giggers will continue to be eligible for unemployment benefits.
Moreover, the bill affords an additional $100 a week to earners who have a mix of income types. If you earn your income both as an employee and a freelancer or a contractor (doing side gig work for example) you fall into this “mixed earners” category. Certain workers who have at least $5,000 per year in self-employment income, but are disqualified from receiving Pandemic Unemployment Assistance because they also have an employer could be eligible for the additional $100 per week in unemployment benefits.
The first stimulus that was passed in March banned benefits for the mixed earner category of workers. The new provision will also cover part-time workers, self-employed, and others that may have fallen into a gray area for unemployment benefits.
How will I get my unemployment benefits?
You can reach out to your local unemployment office for specific information about how you will get your benefits.
What other benefits may I be eligible for under the second coronavirus relief package?
Under the second coronavirus relief package, you may also be eligible to receive a second wave of stimulus payments – up to $600 for individuals, $1,200 for joint taxpayers, and an additional $600 for each dependent child under age 17.
As of today, there is nothing you need to do to get a stimulus payment. The IRS has begun issuing stimulus payments using the most recent information they have on file, likely from your 2019 tax return, either by direct deposit or by check.
If you have an adjusted gross income (AGI) of up to $75,000 ($150,000 married filing jointly), you could be eligible for the full amount of the recovery rebate.
*Note, adjusted gross income (AGI) is your gross income like wages, salaries, or interest minus adjustments for eligible deductions like student loan interest or your IRA deduction. Your AGI can be found on line 8b of your 2019 Form 1040.
As your AGI increases over $75,000 ($150,000 married filing jointly), the stimulus amount will go down. The second stimulus check rebate will completely phase out at $87,000 for single filers with no qualifying dependents and $174,000 for those married filing jointly with no dependents.
For more information on the second stimulus check, including information on when or how you may receive it, be sure to visit our ”Where’s My Second Stimulus Check?” blog post.
TurboTax Has You Covered
Don’t worry about knowing these tax provisions. TurboTax is here for you and will continue to keep you updated on coronavirus relief as more details and guidance come out. Be sure to check back with the TurboTax Blog and our TurboTax Coronavirus Tax Center for the latest information.
At tax-time when you sit down to file your taxes, TurboTax has COVID-19 specific guidance to help you with impacts that happened this year and through coronavirus relief. TurboTax will ask simple questions about you and give you the tax deductions and credits you’re eligible for based on your entries.