Unemployment Insurance

In general, the Federal-State Unemployment Insurance Program provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined under State law), and meet other eligibility requirements of State law. Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who meet the requirements of State law.

Each State administers a separate unemployment insurance program within guidelines established by Federal law. Eligibility for unemployment insurance, benefit amounts and the length of time benefits are available are determined by the State law under which unemployment insurance claims are established. In the majority of States, benefit funding is based solely on a tax imposed on employers.

For an unemployed person to receive compensation through unemployment insurance, they must meet the State requirements for wages earned or time worked during an established period of time referred to as a "base period". They must also be determined to be unemployed through no fault of their own as determined under their State law, and meet other eligibility requirments of State law.

In general, benefits are based on a percentage of an individual's earnings over a recent 52-week period - up to a State maximum amount. Benefits can be paid for a maximum of 26 weeks in most States. Additional weeks of benefits may be available during times of high unemployment. Benefits are subject to Federal income taxes and must be reported on Federal income tax returns.

To learn more about the laws and taxes for unemployment insurance, check with the State in which you are doing business.