This article was last updated on January 4
[Updated for new $300 FPUC payment in 2021] I have been getting this question across several articles published around the recently extended enhanced unemployment benefit programs now in place for 2021 and enacted to address the COVID-19 induced economic slowdown and job losses. Fortunately the Department of Labor (DOL) has issued additional Unemployment Insurance guidance confirming the fact that individuals who are entitled to receive any portion of their state’s regular unemployment compensation (UC) will also receive the $300 flat weekly payment through to March 14th, 2021. The original $600 FPUC payment approved under the CARES act had expired on July 31, 2020.
The $300 weekly FPUC supplementary payment is payable for weeks of unemployment beginning on or after the date on which the state enters into an agreement with the Department of Labor. In states where the week of unemployment ends on a Saturday, the first week for which FPUC may be paid is the week ending January 2nd, 2021. In states where the week of unemployment ends on a Sunday, the first week for which FPUC may be paid is the week ending January 3rd, 2021. The cost of the additional $300 payments to eligible individuals each week is 100% federally funded, but administered by the state UI agency.
Now many states, like PA and CA, offer Partial Unemployment Benefit Credits to offset the impacts of reduced benefits from part time work, but in many higher income states this won’t make much of an impact. Also with the extra $300 FPUC weekly payment now in play, many people who don’t qualify for even $1 of unemployment insurance won’t get this supplementary payment for the next four months it is in effect. Which could make them worse overall.
One important note in the DOL guidance letter is that individuals whose underlying benefit payments are intercepted to pay debts (e.g., over payments) are eligible for the $300 FPUC, even if 100% of their weekly benefit amount is intercepted. Benefits intercepted to pay debts are considered to be compensation for the week. Child support obligations however must be deducted from FPUC payments in the same manner and to the same extent as these obligations are deducted from regular UC.
Also the DOL is clear that the $300 payment is taxable and will be included in the year end 1099G. Beneficiaries may be required to withhold taxes for this payment.