COVID-19 Unemployment Relief Extended

On March 11, 2021, the American Rescue Plan Act was enacted into law.  The Act contained a number of provisions addressing aspects of COVID relief, including changes to FFCRA tax credits, expanding the Employee Retention Tax Credit, and expanding the PPP.  This Client Alert discusses the provisions of the Act addressing unemployment compensation.

Under the American Rescue Plan:

  • Pandemic Unemployment Assistance—the federally funded unemployment benefits provided to individuals not eligible for regular unemployment benefits—are extended through September 6, 2021, and eligible individuals can now collect up to 79 weeks of benefits;
  • Federal Pandemic Unemployment Compensation—the federally funded supplemental weekly cash unemployment payment of $300—is extended through September 6, 2021;
  • For 2020, taxpayers with an adjusted gross income of less than $150,000 do not have to include the first $10,200 of unemployment compensation the taxpayer received (or, in the case of a joint return, received by each spouse) in the taxpayer’s gross income—i.e. not subject to federal income tax.  Thus, if an employee received unemployment income in 2020 and already filed the employee’s taxes, the employee may need to amend the employee’s 2020 tax returns now to take advantage of the changes made by the Act. 

Please contact a MacDonald Illig attorney if you have any questions regarding the American Rescue Plan.