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Newly Reinstated Federal Unemployment Benefits

Posted by Kevin on January 18, 2021 under Bankruptcy Blog | Comments are off for this article

The $900 billion pandemic relief law enacted on December 27 extended federal unemployment benefits, plus added a new “mixed earner” benefit.


The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA), was enacted on December 27. It extended unemployment benefits that were in the CARES Act of last spring, although with changes. One of the most impactful of those benefits had expired. Others were about to expire at the end of 2020. For these, the law came in the nick of time. The new law also created a new “mixed earner” benefit for workers with prior income from both wages and self-employment.

The Reinstated but Reduced Extra Federal Benefit

Under the CARES Act, the Federal Pandemic Unemployment Compensation (FPUC) benefit provided an extra $600 benefit per week. This was in addition to the regular state benefit. It expired way back on July 31, 2020.

The new law reinstates this extra federal unemployment benefit, but reduces it to $300 per week. These benefits are now set to last until March 14, 2021.

To be clear, it applies to

supplemental benefits for weeks of unemployment beginning after December 26, 2020, and ending on or before March 14, 2021. FPUC is not payable with respect to any week during the gap in applicability, that is, weeks of unemployment ending after July 31, 2020, through weeks of unemployment ending on or before December 26, 2020.

U.S. Dept. of Labor Press Release of December 30, 2020.

The Extended Benefit for Formerly Self-Employed and Regular W-2 Employees

The CARES Act’s Pandemic Unemployment Assistance (PUA) expanded benefits in two main ways. First, it extended eligibility to the self-employed, gig workers.  Second, it applied to those otherwise ineligible for unemployment benefits, providing benefits for up to 39 weeks.  This program had specific pandemic-related eligibility requirements. It was to expire on December 31, 2020.

The new law extends this benefit’s expiration from that date to March 14, 2021. Also:

For individuals on PUA who have not exhausted their benefit eligibility of up to 50 weeks, the program also provides for continuing benefits for eligible individuals for weeks of unemployment through April 5, 2021.

U.S. Dept. of Labor Press Release of December 30, 2020.

The Extended Benefit for Those Who’ve Exhausted Benefits

The CARES Act’s Pandemic Emergency Unemployment Compensation (PEUC) program gave people an extra 13 weeks of unemployment benefits. Individuals usually get up to 26 weeks of unemployment benefits under state law. Some states provide fewer weeks—sometimes much fewer. CARES added up to 13 more weeks for eligible workers, for up to a total of 39 weeks of benefits. Section 2102(c)(2) of CARES.

The new law of December 27, 2020 added 11 weeks of benefits. This raises the total benefit maximum from 39 weeks to 50 weeks.

The New Mixed Earner Unemployment Compensation

In the new law Congress has tried to fix an unanticipated problem under the CARES Act. People who had prior income from both traditional employment and also self-employment had a tough choice. They had to either apply for traditional unemployment or for the new Pandemic Unemployment Assistance (PUA) for their self-employment income. They could not receive both. This tended to reduce their benefit because some of their income would not count towards the amount of their benefit.

The new law addressed this in a simple but not very precise way. The Mixed Earner Unemployment Compensation (MEUC) benefit gives an extra $100 per week of Pandemic Unemployment Assistance to those who qualify.   To qualify the worker must have earned at least $5,000 in self-employment income in the most recent tax year. One other condition: each state gets to decide whether to sign on to MEUC. So check with your state employment department.

Status of the $600 Pandemic Relief Payments

Posted by Kevin on January 5, 2021 under Bankruptcy Blog | Comments are off for this article

Congress passed and Trump signed the new pandemic relief law, the increase to $2,000 isn’t happening, so when are the $600 payments coming?  


On December 27, President Trump signed the pandemic relief law that Congress had passed 6 days earlier.

The new law includes pandemic relief checks of $600 (instead of the $1,200 amount in last spring’s CARES Act). This past week there were a series of events related to possibly increasing the $600 pandemic relief checks to $2,000. But after all that, now it’s clear that that’s not happening. At least not for a while.

The present Congress ended on Sunday, January 3, 2021, and any laws not passed died with it. “When one Congress expires, all the pending legislation goes with it.” (Congressional Institute). That included any laws in either the House of Representatives or the Senate dealing with the increase to $2,000. The new Congress started on the same day, January 3, and may or may not try to pass additional pandemic relief payments in the future.

But in the meantime what’s going on with the now-approved $600 “Economic Impact Payments”?

Who Gets the $600 Payments?

Many of the rules for distributing the payments are the same as for the $1,200 CARES Act payments of last spring.

The $600 payments are going to all U.S. citizens and resident aliens. Sensibly, married couples who filed income taxes jointly are receiving $1,200 (2 times $600).

In addition, that same $600 amount is going to all dependent children 16 years old or less. (This is an increase from the $500 per child under CARES.) As stated in a December 29, 2020 IRS news release:

Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment.

However, dependents 17 years or older aren’t eligible to receive anything.

As with the CARES Act, the payments are reduced for individuals with 2019 adjusted gross income of more than $75,000. For married couples who filed joint returns, that income amount is $150,000. The payments phase out completely for individuals with income of $87, 000 and for couples at $174,000. These phase-out amounts are lower than under the CARES Act (which were $99,000 and $198,000, respectively).

Another change expanded eligibility for this time. The IRS news release puts it this way:

Under the earlier CARES Act, joint returns of couples where only one member of the couple had a Social Security number were generally ineligible for a payment – unless they were a member of the military. But this month’s new law changes and expands that provision, and more people are now eligible. In this situation, these families will now be eligible to receive payments for the taxpayers and qualifying children of the family who have work-eligible SSNs.

The Timing

The U.S. Treasury Department’s recent press release announced the timing of the payments as follows:

On December 29, the Treasury Department and the Internal Revenue Service began delivering a second round of Economic Impact Payments to millions of Americans as part of the implementation of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021.  The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week.  Paper checks began to be mailed on December 30.

What to Do to Get Your Payment

The same Treasury press release states that “[t]his second round of payments will be distributed automatically, with no action required for eligible individuals.” The more detailed IRS news release of the same date adds the following details:

Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021. The IRS reminded taxpayers that the payments were automatic, and they should not contact their financial institutions or the IRS with payment timing questions.

As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way.

Anyone who received the first round of payments earlier this year but doesn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card. For those in this category, the payments will conclude in January.

Also, from the same IRS source:

Payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at using the agency’s Non-Filers tool by November 21, 2020 or who submitted a simplified tax return that has been processed by the IRS.

If You’re Eligible But You Don’t Get the Payment…

The following applies both to the prior CARES payments and the new $600 ones. Both sets of payments are actually special income tax credits that the U.S. Treasury is paying in advance. Usually we receive tax credits after we file our income tax returns. But not these. These Economic Impact Payments are advance payments of the “Recovery Rebate Credit” on our upcoming tax returns.

So if you’re eligible for but for any reason do not receive either the CARES or the new $600 payments, claim it as a tax credit on your next income tax returns and receive payment that way.

To Get More Information about Your Payment…

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