Why don’t people on pandemic unemployment benefits have to look for work like people on regular unemployment?
Question: How come people can just keep collecting on PUA but people on UI have to look for work? It doesn’t seem fair.
Answers: Numerous readers have asked this question since the State Department of Labor and Industrial Relations revived the May 30 job-hunting requirement for people who receive standard unemployment insurance or its federal extensions, including Pandemic Emergency Unemployment Compensation (PEUC) , take advantage of. By then, the requirement had been waived for the duration of the pandemic.
Pandemic Unemployment Assistance (PUA), a federally funded program created during the pandemic for the self-employed and others who are not eligible for standard unemployment benefits, did not fall under the same requirement. Now DLIR has announced that PUA applicants will be required to look for work from the week of June 13th and report employment contacts on their PUA portal from June 20th.
The rules are slightly different as PUA applicants include many people who have run their own businesses and have not been employed by others. “Examples of PUA job searches could include, but are not limited to: promoting your business, creating a profile on freelance websites, promoting and marketing your business, or meeting with a business support organization such as the Hawaii Small Business Development Center or the US Small Business Administration,” says a DLIR press release.
With the availability of COVID-19 vaccines and Hawaii’s economy on the rise, “we want people to redouble their efforts to make a living and contribute to our state’s economic recovery,” said DLIR Director Anne Perreira-Eustaquio.
PUA covers eligible independent contractors and others outside of the traditional UI system, as well as individuals whose livelihoods have otherwise been impacted by COVID-19. For example, some parents were unable to work because they didn’t have space to host their children when schools and childcare facilities were closed due to the pandemic.
“If an individual was previously self-employed but has no plans to return to self-employment, or is not eligible for regular UI benefits but is eligible for PUAs due to COVID-19, they must be looking for work or engaging in search-related activities in the same manner as regular unemployment insurance claimants,” the press release said.
Visit hawaiiunemploymentinfo.com for more information.
Q: I thought you said the IRS would automatically refund people who filed their taxes before there was the federal unemployment exemption. I never got any money back. What do I do now?
A: Yes, the Internal Revenue Service states that it recalculates the taxes owed for individuals who are eligible to exclude up to $10,200 in unemployment benefits from their taxable federal income and filed their taxes before the exclusion took effect. It started doing so last month and will continue through the summer, either refunding an overpayment or applying it to other outstanding taxes, the agency says on its website.
However, based on the rough numbers you provided, you are not eligible for exclusion because your modified adjusted gross income is too high – it must be less than $150,000.
“The modified AGI to qualify for this exclusion is your adjusted gross income for 2020 minus any unemployment benefits you received. That threshold stays the same for all filing statuses, whether you’re married and filing joint taxes (it doesn’t double to $300,000),” the IRS says on its website.
You can confirm your eligibility (or ineligibility) on your 2020 tax return Form 1040, 1040-SR, or 1040-NR: Subtract the entire unemployment benefit reported on Schedule 1, line 7 from the amount reported on line 11 of your AGI. If the total is less than $150,000, you are eligible for disqualification.
To be clear, once eligibility is assured, the disqualification applies to up to $10,200 in unemployment benefits for each claimant upon return.
Also, we want to emphasize that individuals who are eligible for the exclusion should file an amended statement (instead of waiting for the IRS to recalculate) “if you are now eligible for any deductions or credits due to the excluded unemployment benefits that are at your original return were not claimed. … For example, if you didn’t claim Earned Income Tax Credit (EITC) on your originally filed tax return because your AGI was too high, but the allowable unemployment benefit exclusion now reduces your AGI, you should file an amended tax return to account for the to claim credit if he is eligible now,” the IRS says on its website.