During the COVID-19 Pandemic, the federal government has initiated several programs that have altered the qualifications for federal unemployment as well as the range of benefits. The three most significant changes can be categorized as the Federal Pandemic Unemployment Compensation (FPUC) program, the Pandemic Emergency Unemployment Compensation (PEUC) program, and the Pandemic Unemployment Assistance (PUA) program. Please see the following information regarding FPUC’s and PEUC’s expansion of benefits, as well as PUA’s special eligibility guidelines.
As we previously noted in our Coronavirus Aid, Relief, and Economic Security (CARES) article, the Act provides for a temporary emergency increase in unemployment compensation benefits, referred to as the FPUC program. FPUC provides an additional $600 per week payable to all individuals who are eligible for unemployment benefits for weeks beginning March 29, 2020 and ending July 31, 2020. Eligible individuals receive FPUC payments at the same time as their unemployment payments. (FPUC payments are disregarded when determining the amount of income under Medicaid or SCHIP.) IDES will include FPUC when preparing the 1099G tax documents and must withhold taxes from the weekly benefit amount and from the $600 FPUC if an individual elects to have taxes withheld.
Individuals who have received their entire 26 weeks of unemployment benefits may be eligible for more weeks under the CARES Act. PEUC provides up to 13 additional weeks of federally funded unemployment benefits for individuals who have exhausted their regular benefits.
For individuals who are unemployed for reasons attributable to COVID-19 and not covered by the state’s regular unemployment insurance program, the PUA program provides 100% federally funded unemployment. To establish eligibility under PUA, the claimant will have to demonstrate he/she is not eligible under the regular program. Applying for and being denied benefits under the regular program can help establish eligibility under the new temporary program. PUA benefits do provide coverage for self-employed sole proprietors and independent contractors. IDES is contracting with Deloitte to implement and maintain a web-based solution for PUA fully implemented by the week of May 11.
Special Notes
Based upon the additional $600 provided through the CARES Act employees making $50 thousand per year or less should have no financial impact being laid off. As always, claimants must certify every two weeks that they are able and available to work, and if they refuse to go back to work, they are no longer eligible for unemployment benefits, including the FPUC enhancement. Additionally, any businesses hiring new employees are required to report.
Now is a good time to consult a tax professional to best determine how the law affects your unique situation. John Kasperek Co., Inc. is a leading expert accounting firm in the Chicago Southland region and can be reached at (708) 862-2262 or email
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