 TITLE: How Unemployment Benefits Are Changing in 2021 CONTENT: Extended Federal Unemployment Benefits in 2021\n----------------------------------------------\nThe American Rescue Plan Act of 2021 (ARPA) was signed into law in March and extends many of the unemployment benefits that were part of previous pandemic-relief bills until September 6, 2021. Here's what you can expect:\n*   **$300 in weekly benefits** in addition to your state unemployment benefits under Federal Pandemic Unemployment Compensation (FPUC).\n*   **$100 in weekly benefits** for people who had a mix of income from employment (reported on a W-2) and at least $5,000 in self-employment income (often reported on Form 1099) in the year before filing for unemployment, as part of Mixed Earner Unemployment Compensation (MEUC).\n*   **Continued coverage for expanded pool of eligible workers** as part of Pandemic Unemployment Assistance (PUA). PUA will continue to allow people who otherwise wouldn't qualify for unemployment to collect benefits, including gig workers, contractors, business owners and people with limited work histories.\n*   **Continued benefits for people who have used up their normal state benefits,** as part of the Pandemic Emergency Unemployment Compensation (PEUC) program.\nAdditionally, if you receive the $300 weekly FPUC benefit, the money won't count toward your income when determining your eligibility for Medicaid or the Children's Health Insurance Program.  \n### A Retroactive Change to 2020 Unemployment Benefits\nThe law also made a change that could impact you if you collected unemployment in 2020. Generally, you need to pay federal income taxes on unemployment benefits—some states tax unemployment benefits as well.\nHowever, for 2020, the first $10,200 in unemployment benefits won't be taxed by the federal government if your adjusted gross income (AGI) was under $150,000. The exemption expands to $20,400 for couples who file jointly if both spouses collected unemployment, although the $150,000 AGI limit stays the same.\nIf you already filed your 2020 tax return and paid taxes on unemployment income, do not file an amended return yet. In a recent statement, the IRS recommended not taking any action until the agency provides further guidance.\nYou Might Need to Reapply for Unemployment\n------------------------------------------\nThe extension of the federal pandemic programs may be automatic for many people who are receiving unemployment benefits. However, you may need to reapply if it's been a year since you first started receiving unemployment. Check with your state, as the requirement can vary depending on where you live and the types of benefits you receive.  \nYou May Qualify for Discounted or Free Health Coverage\n------------------------------------------------------\nIf you're unemployed, you may be able to get health coverage from Medicaid, an Affordable Care Act (ACA) Marketplace or a health care provider. Another option may be to continue the coverage you had at work through Consolidated Omnibus Budget Reconciliation Act (COBRA).\nThe ARPA makes several significant changes to health insurance costs:\n*   **May expand Medicaid** through new state incentives depending on where you live.\n*   **Increases the premium tax credit (PTC).** The PTC, a refundable tax credit for eligible families using an ACA Marketplace plan, will be increased and expanded through 2022, which could lower your monthly premium. Kaiser Family Foundation has an updated calculator you can use to estimate your subsidy.\n*   **Offers the PTC to unemployed individuals.** If you're eligible for unemployment during 2021, you can now receive the PTC as if your income is 133% of the federal poverty line—the highest subsidy available. The change is particularly important for people living in states that didn't expand Medicaid, creating a coverage gap where residents couldn't qualify for the PTC or Medicaid.\n*   **Subsidizes COBRA premiums.** If you involuntarily left your job, the federal government may pay the entire cost for your continued COBRA coverage from April 1 to September 30, 2021. The benefit can apply if you're currently enrolled in COBRA; you also have a chance to enroll now, even if you previously declined coverage. The subsidy ends before September 30 if you get another job with employer-provided health care or use up your 18 months of COBRA coverage.\nLearn more about getting help paying for medical bills.  \nHow to File for Unemployment in 2021\n------------------------------------\nAs was previously the case, you'll continue to file for unemployment through the state where you worked. The filing process hasn't changed for many people, although some states are implementing minor changes to help prevent fraud or increase efficiency.\nGenerally, you can't collect unemployment unless you're out of work for no fault of your own (in other words, you didn't quit), and you earned enough wages during a \"base period\" before filing. States may have additional requirements as well. However, the pandemic has led to several changes, so you'll want to check with your state's unemployment agency to see if you can qualify.\nFor example, you may be eligible for PUA benefits even if you usually wouldn't have enough work history to qualify for unemployment in your state. Or, you may qualify for unemployment if you had to quit your job or stay home to care for your child because of the pandemic.\nYou can use the unemployment benefits finder tool to find links to general information, details on how to apply and relevant coronavirus updates for your state.  \nWill Collecting Unemployment Hurt Your Credit?\n----------------------------------------------\nWhile you might be more likely to fall behind on bills if you're out of work, which could hurt your credit, collecting unemployment doesn't directly impact your credit.\nYou may also see current or past employers listed on your credit report if you listed them on previous credit applications. Even when that's the case, though, your income and current employment status aren't on your credit reports and don't impact your credit scores.\nCredit scores aside, it could be more difficult to qualify for a loan or credit card if you don't have a job. However, it may be possible, especially if you have good credit and another source of income.\nYou can also sign up for free credit monitoring from Experian to keep an eye on your credit. And learn about more ways to protect your credit during the pandemic. END