Question: How come people on PUA can just keep collecting but people on UI have to search for work? It doesn’t seem fair.
Answer: Numerous readers have asked this question since the state Department of Labor and Industrial Relations revived the job-search requirement as of May 30 for people collecting standard unemployment insurance or its federal extensions, including Pandemic Emergency Unemployment Compensation (PEUC). Until 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 ineligible for standard UI, did not fall under the same requirement. Now the DLIR has announced that PUA claimants will have to search for work starting the week of June 13 and report employment contacts in their PUA portal starting June 20.
The rules are slightly different because PUA claimants include many people who ran their own enterprises and were not employed by others. “Examples of PUA work search could include but are not limited to: advertising your business, creating a profile on freelance websites, promoting and marketing your business, or meeting with an organization assisting businesses such as the Hawaii Small Business Development Center or the U.S. Small Business Administration,” according to a DLIR news release.
With COVID-19 vaccines available and Hawaii’s economy on the upswing, “we want people to redouble their efforts to earn a living and aid in our state’s economic recovery,” said DLIR Director Anne Perreira-Eustaquio.
PUA covers eligible independent contractors and others outside the traditional UI system, as well as people whose livelihoods were disrupted by COVID-19 in other ways. For example, some parents couldn’t work because they had no place to take their children when schools and child care facilities were closed due to the pandemic.
“If an individual was previously self-employed but has no plans to return to self- employment or if they are ineligible for regular UI benefits but eligible for PUA due to COVID-19, then they will be required to do a work search or work search- related activity in the same way regular unemployment insurance claimants do so,” the news release said.
Find more information at hawaiiunemploymentinfo.com.
Q: I thought you said the IRS would automatically refund people who filed their taxes before there was the federal exemption for unemployment. I never got any money back. What do I do now?
A: Yes, the Internal Revenue Service says that it is recalculating taxes owed for people who are eligible to exclude up to $10,200 in unemployment compensation from their federal taxable income and had filed their taxes before the exclusion took effect. It began doing so last month and will continue through the summer, either refunding an overpayment or applying it to other outstanding taxes owed, the agency says on its website.
However, based on the rough figures you provided, you are not eligible for the exclusion because your modified adjusted gross income is too high — it must be less than $150,000.
“The modified AGI for purposes of qualifying for this exclusion is your adjusted gross income for 2020 minus the total unemployment compensation you received. This threshold stays the same for all filing statuses, regardless of whether you’re married and file a joint tax return (it doesn’t double to $300,000),” the IRS says on its website.
You can confirm your eligibility (or ineligibility) using your 2020 tax return Form 1040, 1040-SR or 1040-NR: Subtract all of the unemployment compensation reported on Schedule 1, Line 7, from the amount of your AGI reported on Line 11. If the total is under $150,000, you’re eligible for the exclusion.
To be clear, once eligibility is assured, the exclusion applies to up to $10,200 of unemployment compensation for each filer on the return.
Also, we want to emphasize that people eligible for the exclusion should file an amended return (rather than waiting for the IRS recalculation), “if as a result of the excluded unemployment compensation you now qualify for deductions or credits not claimed on your original return. … For example, if you did not claim the Earned Income Tax Credit (EITC) on your originally filed return because your AGI was too high, but the exclusion allowed for unemployment compensation now reduces your AGI, you should file an amended return to claim the credit if now eligible,” the IRS says on its website.
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