The $ 1.9 billion US bailout plan is almost legal, which means additional unemployment benefits for millions of workers should be on the way soon.
The Covid Assistance Bill, passed by the House of Representatives on Wednesday, increases unemployment benefits through Labor Day and increases it by $ 300 a week. The Senate passed the legislation Saturday.
President Joe Biden hopes to sign the bill Friday. The issue is time-sensitive – millions of unemployed workers will lose their benefits after March 14 without another extension.
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According to the Department of Labor, more than 18 million Americans collected benefits by mid-February.
“These solutions respond to the calls of employees who saw their industries evaporate last year, and those we heard from working parents who have been juggling childcare, schooling and their own work for months,” said Richard Neal, D-Mass. , Chairman of the House Ways and Means Committee, said he approved the bill.
Here’s what unemployed workers need to know about the legislation.
Unemployment benefits extended
The bill will increase the duration of the benefits offered by temporary pandemic relief programs.
Aid would end on September 6 instead of March 14, which amounts to an extension of almost six months.
The programs include Pandemic Unemployment Assistance for the self-employed, gig and other workers who do not qualify for state-level assistance, and Pandemic Emergency Unemployment Compensation, which pays extra weeks of state benefits to the long-term unemployed.
The bill offers PUA recipients a maximum of 79 weeks benefits, compared to the current 50-week limit. PEUC recipients would receive up to 53 weeks benefits instead of 24.
$ 300 unemployment boost
Beneficiaries will also receive an additional $ 300 per week through September 6th.
According to Labor Department data, state unemployment benefits replaced, on average, about 38% of wages before dismissal in the third quarter of the year. An extra $ 300 a week would increases the wage replacement to 74%.
The $ 900 billion Covid aid package signed by former President Donald Trump in late December also increased benefits by $ 300 a week. This supplement has been in effect since early January.
A subsidy for lost wages offered by a Trump executive measure also offers $ 300 a week for up to six weeks, starting in August.
$ 10,200 tax break
The legislation reduces (or eliminates) the taxes that workers owe on unemployment benefits they received in 2020.
About 40 million people received unemployment benefits last year, according to the Century Foundation.
The account waiving federal taxes on the first $ 10,200 unemployment benefits of an individual raised last year. Married couples filing a joint tax return are not taxed on the first $ 20,400 unemployment income.
However, states may not waive the tax. More than half currently levy a government revenue on unemployment benefits.
The federal tax break applies to individuals and couples who earned less than $ 150,000 in adjusted gross income by 2020.