Filing for unemployment benefits? What to know before you start your claim

April 14, 2020, 10:01 PM UTC

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If you are suddenly navigating the world of unemployment benefits, you’re not alone: a stunning 22 million Americans applied for unemployment over the past month. Some states, especially those with antiquated paper filing systems, have been pushed to the brink by the surge of applicants, which, given the economic shutdown, is not expected to abate anytime soon.

Adding to the confusion: as part of the $2.2 trillion coronavirus stimulus bill that passed with bipartisan support in late March, there are a host of new benefits and considerations that people filing for unemployment need to be aware of. Not to mention confusion over how this all works. Here are some of the questions—and answers—to help navigate this maze.

Who is eligible for unemployment benefits?

Americans who qualify for their state’s unemployment insurance (UI) benefits, automatically get the new federal benefits. Everyone who qualifies gets an additional $600 weekly, regardless of their previous wages. This is an additional $600 on top of their state unemployment insurance benefit. For example, a worker in New York who gets the maximum state benefit of $504 per week, would receive a total of $1,104 per week.

As long as they remain on the UI rolls, they’ll continue to receive the additional $600 from the federal government through July 31.

Can I get more money from unemployment than I made while working?

Yes—for some workers the combination of their state’s unemployment benefits plus the extra $600 per week will work out to more than they were making previously.

Are self-employed workers, freelancers and independent contractors eligible?

The stimulus bill expanded unemployment benefits—including the additional federal amount—to individuals who don’t normally qualify for unemployment insurance. That includes independent contractors, freelancers, self-employed workers, and gig workers.

But these groups must be out-of-work because of the pandemic. Those reasons include things like having been diagnosed with COVID-19, experiencing symptoms of COVID-19 and seeking diagnosis, your work is closed because of the slowdown, or you are a primary caregiver of a child whose school is closed.

Unemployed part-time workers are also eligible for the additional unemployment benefits. And though normally you have to work at a job for several months before becoming eligible for unemployment benefits, that requirement is now waived.

If I apply via my state, will I automatically get the $600 federal benefits as part of the stimulus?

Yes. Once you’ve been approved by your state for unemployment insurance, you’ll automatically get the additional weekly federal money. All you have to do is to continue to certify your benefits weekly with your state.

How long will it take to start getting payments? And how long will they last?

These $600 additional unemployment checks should start going out later this week. Those who qualify can get retroactive payments as far back as March 29—if they were unemployed at that time.

Out-of-work folks who are approved for unemployment insurance benefits between January 27 and December 31, will be provided 39 weeks of normal unemployment insurance. But the additional weekly $600 will only continue through the week of July 31.

Are unemployment benefits taxed?

Yes. Unemployment benefits are considered taxable income, according to the Internal Revenue Service.

Does filing for unemployment affect your credit score?

For potentially millions of Americans this will be there first-time claiming unemployment insurance benefits. These folks will be relieved to know that unemployment insurance will not impact their credit scores.

How long do I have to wait to start getting unemployment benefits?

The stimulus bill incentivized states to waive their waiting period for applying for unemployment benefits. But you’ll need to check with your state. Either way, the additional $600 unemployment checks are retroactive to the week you lost your job.

More personal finance coverage from Fortune:

—What to do if you can’t pay your bills this month
When will stimulus checks be direct deposited or mailed? Ensure yours isn’t delayed
Debt collectors could seize your stimulus check before you have a chance to use it, lawmakers warn
—What you should know about mortgage forbearance and skipping payments
Everything you need to know about furloughs—and what they mean for workers
Freelancers and independent contractors can now apply for SBA Paycheck Protection Program loans. What you need to know
—The IRS launched portal to get your stimulus check if you don’t file taxes
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO

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