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Unemployment extension
| Unemployment insurance |
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| • Terms and definitions • Court cases • Unemployment insurance programs in the states • Reform proposals related to unemployment insurance • Reform activity in the states related to unemployment insurance • Index of articles about unemployment insurance |
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An unemployment extension is a term that refers to an additional period of eligibility to receive unemployment insurance benefits beyond the standard term. Unemployment insurance benefits received through an unemployment extension are referred to as extended benefits.
During periods of high unemployment, extended benefits up to 13 weeks, depending on the state, are available to workers who have otherwise exhausted their unemployment insurance benefits. Extended benefits up to 20 weeks may also be available in some states during periods of extremely high unemployment.[1]
Background
During periods of high unemployment, states enter extended benefits periods, which allows certain individuals who meet their state's criteria to claim benefits after exhausting regular benefits. When an extended benefit period is active in a state, the agency responsible for distributing benefits notifies workers who exhaust their regular benefits that they may be eligible for extended benefits. Some states may determine eligibility and continue extended benefits payments automatically. In other states, workers need to apply for extended benefits.[2][3]
In most states, eligibility requirements for extended benefits differ from eligibility requirements for standard unemployment insurance benefits. Individuals who qualify for standard unemployment insurance benefits may or may not qualify for extended benefits, depending on the state.[2]
Unlike regular benefits, which states fund fully, the federal government and states are each responsible for paying 50% of extended benefits. States pay their shares of extended benefits from their State Unemployment Trust Fund accounts. The federal government pays its share of extended benefits from the Extended Unemployment Compensation Account.[4]
The federal government expanded unemployment insurance benefits during the coronavirus (COVID-19) pandemic in order to provide financial support to affected individuals and businesses.
Former President Donald Trump (R) signed Pandemic Emergency Unemployment Compensation (PEUC) into law on March 27, 2020, as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Under the CARES Act, the federal government extended unemployment benefits for 13 weeks (through December 31, 2020) and covered 100% of the cost of extended benefits. Trump signed Consolidated Appropriations Act (CAA), 2021, on December 27, 2020, which extended PEUC benefits an extra 11 weeks for a total of 24 weeks of fully federally funded benefits.[5][6][7][8]
PEUC matched the amount paid to workers receiving regular state unemployment, including the federal government's weekly supplement. The federal government added $600 to regular weekly state benefits between March 27 and July 31, 2020. Trump signed a presidential memorandum August 8, 2020, extending the federal supplement at a $300 weekly rate, which was extended in the CAA.[5][6]
American Rescue Plan
President Joe Biden (D) signed the American Rescue Plan on March 14, 2021, which extended Pandemic Emergency Unemployment Compensation (PEUC) benefits an extra 29 weeks, for a total of 53 weeks of fully federally funded benefits. The law also extended the $300 weekly federal supplement.[5][6]
Funding
Extended benefits are funded through state and federal unemployment taxes. This section describes the taxes that fund the unemployment insurance program.
Federal unemployment taxes
- See also: Federal Unemployment Tax
The federal unemployment tax requires employers to pay federal taxes to support the joint federal-state unemployment insurance program.
Federal unemployment tax amounts
While state tax amounts vary, the Federal Unemployment Tax Act (FUTA) tax is 6% of the federal unemployment tax wage base—the first $7,000 of an employee's wages—as of April 2025. Employers can receive an offset of up to 5.4% of their FUTA tax when they pay state unemployment taxes on time. An employer that receives the full 5.4% FUTA credit, therefore, pays 0.6% of the first $7,000 of an employee's wages, or $42, in FUTA tax per qualifying employee.[9][10]
FUTA tax credits are reduced for employers in states that have outstanding federal unemployment loans from the Unemployment Trust Fund’s Federal Unemployment Account on January 1 for at least two consecutive years. If states do not pay federal unemployment loans back by November 10 of the second consecutive year, FUTA tax credits are reduced by 0.3%. The reduction would limit the maximum FUTA tax credit to 5.1%, and employers would pay at least $63 in FUTA taxes per employee making $7,000 or more.[11]
Federal unemployment tax exempt wages
The following types of wages are exempt from FUTA taxes:[12][13]
- Wages paid by a 501(c)(3) nonprofit organization.
- Wages paid for services performed outside the United States.[14]
- Wages paid to a beneficiary or estate after the calendar year of a worker's death.
- Wages paid by a parent to a child under age 21.
- Wages paid by a child to a parent.
- Wages paid from spouse to spouse.
- Wages paid by foreign governments and international organizations.
- Wages paid by a state or local government (or another political subdivision).
- Wages paid by the United States federal government.
- Wages paid to newspaper carriers under age 18.
- Wages paid to a full-time student working fewer than 13 weeks during a calendar year for seasonal camps.
- Wages paid to statutory nonemployees (such as qualified real estate agents and direct sellers).
- Wages paid by a school to a student of the school.
- Wages paid by a hospital to interns.
Penalties for nonpayment of federal unemployment taxes
Failure to pay federal employment taxes can result in the assessment of fees, fines, and prison time. Late fees can range from 0.5% to 25% of the amount owed. Willful evasion of federal employment taxes is a felony punishable by five years in prison and fines of up to $250,000 for individuals, $500,000 for corporations, or both. Willful failure to file a tax return or provide information required by the Internal Revenue Service (IRS) is a misdemeanor punishable by up to one year in prison and fines up to $25,000 for individuals or $100,000 for corporations.[15][16][17][18]
See also
- Unemployment insurance
- Unemployment insurance fraud
- Unemployment insurance fraud recovery
- Unemployment taxes
- Unemployment Trust Fund
- Unemployment filings during the coronavirus (COVID-19) pandemic, 2020-2021
- State government plans to end federal unemployment benefits related to the coronavirus (COVID-19) pandemic, 2021
External links
Footnotes
- ↑ United States Department of Labor, "Unemployment Insurance Extended Benefits," accessed May 19, 2021
- ↑ 2.0 2.1 The Balance Careers, "Extended Unemployment Benefits," accessed July 19, 2021
- ↑ U.S. Department of Labor, "Unemployment Insurance Extended Benefits," accessed July 19, 2021
- ↑ Washington State Legislature, "Washington State's Experience Rating System," accessed July 6, 2021
- ↑ 5.0 5.1 5.2 The Balance, "Unemployment Benefits Extensions," accessed July 19, 2021
- ↑ 6.0 6.1 6.2 Investopedia, "Pandemic Emergency Unemployment Compensation (PEUC) and How to Apply," accessed July 19, 2021
- ↑ FEMA, "FEMA Supplemental Lost Wages Payments under Other Needs Assistance," accessed July 19, 2021
- ↑ U.S. Department of Labor, "U.S. DEPARTMENT OF LABOR ANNOUNCES NEW CARES ACT GUIDANCE ON UNEMPLOYMENT INSURANCE FOR STATES IN RESPONSE TO COVID-19 CRISIS," accessed July 19, 2021
- ↑ Brookings, "How does unemployment insurance work? And how is it changing during the coronavirus pandemic?" July 20, 2020
- ↑ Employment Law Firms, "How Unemployment Works," accessed May 18, 2021
- ↑ Internal Revenue Service, "FUTA Credit Reduction," accessed August 4, 2022
- ↑ Internal Revenue Services, "Publication 15, (Circular E), Employer's Tax Guide For Use in 2021," accessed July 6, 2021
- ↑ Internal Revenue Services, "Publication 15-A, Employer's Supplemental Tax Guide For Use in 2021," accessed July 6, 2021
- ↑ Unless on or in connection with an American vessel or aircraft and either performed under contract made in U.S., or alien is employed on such vessel or aircraft when it touches U.S. port.
- ↑ IRS, "Interest and penalties for filing and paying taxes late," accessed February 22, 2023
- ↑ Esfandi Law Group, "FEDERAL TAX EVASION," accessed August 4, 2022
- ↑ IRS, IRS Rate Increase accessed August 4, 2022
- ↑ Tax Attorney, payroll accessed August 4, 2022
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State unemployment taxes by state
- See also: State unemployment tax
In addition to federal unemployment insurance taxes, employers must also pay state unemployment taxes (SUTA) to support the joint federal-state unemployment insurance program. Each state sets its own tax rate range, wage base (the amount of employee pay an employer needs to pay taxes on for each employee), and experience rating system.
Experience-rated unemployment insurance program systems allow states to tax employers according to the amount of unemployment insurance benefits drawn by their former employees. Employers with low experience ratings pay less in unemployment taxes than employers with high experience ratings. New employers begin paying into the unemployment insurance system at the new employer rate.
State unemployment tax amounts
SUTA tax amounts vary by state. The following list provides a summary of the SUTA tax amounts across states as of January 2025:[1][2][3]
- The new employer rate ranged from 0.35% in South Carolina to 6.09% in some cases in North Dakota.
- Regular rates ranged from 0% for employers with the lowest experience rating in 10 states (Iowa, Missouri, Mississippi, Montana, Kansas, Nebraska, New York, South Dakota, Wisconsin, and Wyoming) up to 12.65% in Massachusetts for employers with the highest experience ratings.
- Arkansas, California, Florida, and Tennessee had the lowest wage bases at $7,000, and Washington had the highest wage base at $72,800.
The table below outlines regular SUTA tax rate ranges for experienced employers and wage bases and new employer SUTA tax rates for all 50 states as of January 2025.
| State unemployment tax rates | |||
|---|---|---|---|
| State | SUTA new employer tax rate | Employer tax rate range[4] | SUTA wage bases |
| Alabama | 2.7% | 0.20% – 6.80% | $8,000 |
| Alaska | 1.0% | 1.00% – 5.40% | $51,700 |
| Arizona | 2.0% | 0.04% – 9.72% | $8,000 |
| Arkansas | 2.0% | 0.1% – 5.0% | $7,000 |
| California | 3.4% | 1.5% – 6.2% | $7,000 |
| Colorado | 3.05% | 0.64% – 12.34% | $27,200 |
| Connecticut | 2.2% | 0.1% – 10.0% | $26,100 |
| Delaware | 1.0% | 0.3% – 5.4% | $12,500 |
| D.C. | 2.7% or prior year average | 1.00% – 7.40% | $9,000 |
| Florida | 2.7% | 0.1% – 5.4% | $7,000 |
| Georgia | 2.7% | 0.06% – 8.1% | $9,500 |
| Hawaii | 2.4% | 2.4% – 5.6% | $62,000 |
| Idaho | 1.0% | 0.23% – 5.4% | $55,300 |
| Illinois | 3.65% | 0.75% – 7.85% | $13,916 |
| Indiana | 2.5% | 0.5% – 11.2% | $9,500 |
| Iowa | 1.0% | 0.0% – 7.0% | $39,500 |
| Kansas | 1.75% | 0.0% – 6.65% | $14,000 |
| Kentucky | 2.7% | 0.3% – 9.0% | $11,700 |
| Louisiana | Varies | 0.09% – 6.2% | $7,700 |
| Maine | 2.41% | 0.3% – 6.27% | $12,000 |
| Maryland | 2.6% | 0.3% – 7.5% | $8,500 |
| Massachusetts | 2.13% | 0.83% – 12.65% | $15,000 |
| Michigan | 2.7% | 0.06% – 10.3% | $9,000 |
| Minnesota | Varies | 0.4% – 8.9% | $43,000 |
| Mississippi | 1.0% | 0.0% – 5.4% | $14,000 |
| Missouri | 1.0% (nonprofits) 2.376% (others) | 0.0% – 6.0% | $9,500 |
| Montana | Varies | 0.00% – 6.12% | $45,100 |
| Nebraska | 1.25% | 0.0% – 5.4% | $9,000 ($24,000 for max rate) |
| Nevada | 2.95% | 0.25% – 5.4% | $41,800 |
| New Hampshire | 2.7% | 1.00% – 7.00% | $14,000 |
| New Jersey | 3.1% | 0.6% – 6.4% | $43,300 |
| New Mexico | 1.0% | 0.33% – 5.4% | $33,200 |
| New York | 4.1% | 0.0% – 8.9% | $12,800 |
| North Carolina | 1.0% | 0.06% – 5.76% | $32,600 |
| North Dakota | 1.03% (positive) 6.09% (negative) | 0.08% – 9.69% | $45,100 |
| Ohio | 2.7% | 0.5% – 10.2% | $9,000 |
| Oklahoma | 1.5% | 0.3% – 9.2% | $28,200 |
| Oregon | 2.4% | 0.9% – 5.4% | $54,300 |
| Pennsylvania | 3.822% | 1.42% – 10.37% | $10,000 |
| Rhode Island | 1.21% | 1.1% – 9.7% | $29,800 ($31,300 for negative balance) |
| South Carolina | 0.35% or 1% | 0.06% – 5.46% | $14,000 |
| South Dakota | 1.2% | 0.0% – 8.8% | $15,000 |
| Tennessee | Varies | 0.01% – 10.0% | $7,000 |
| Texas | 2.7% | 0.25% – 6.25% | $9,000 |
| Utah | Varies | 0.2% – 7.2% | $48,900 |
| Vermont | 1.0% | 0.4% – 5.4% | $14,800 |
| Virginia | 2.5% | 0.1% – 6.2% | $8,000 |
| Washington | Varies | 0.27% – 8.15% | $72,800 |
| West Virginia | 2.7% | 1.5% – 8.5% | $9,500 |
| Wisconsin | 3.05% (<$500k payroll) 3.25% (>$500k payroll) | 0.0% – 12.0% | $14,000 |
| Wyoming | Varies | 0.0% – 8.5% | $32,400 |
Penalties for nonpayment of state unemployment taxes
- See also: Unemployment insurance fraud
Under state unemployment insurance laws, businesses that falsely classify employees as independent contractors, neglect to report wages, or set up fictitious employer accounts to avoid unemployment tax liabilities have committed unemployment insurance fraud. State workforce agencies are tasked with administering unemployment insurance programs. State agencies work with local, state, and federal law enforcement agencies to identify and prosecute fraudulent unemployment insurance claims.
State laws governing unemployment insurance may classify unemployment insurance fraud as either a misdemeanor or felony offense, depending on the extent of the fraud. Federal guidelines require states to assess a minimum penalty of 15% of the amount of the fraudulent claim, according to the U.S. Department of Labor. States generally prohibit individuals found guilty of committing unemployment insurance fraud from receiving future benefits for a minimum of six weeks for every week of fraudulent claims.[5][6]
Criminal prosecution under unemployment insurance laws may result in the following penalties, depending on the state:[5][6]
- Fines up to or exceeding $10,000, depending on the state.
- Incarceration.
- Probation in addition to, or in lieu of, incarceration.
- Repayment of fraudulent benefits.
- Forfeiture of future income tax refunds.
- Permanent loss of eligibility for unemployment insurance benefits.
Standard term of benefits
Extended benefits are available to workers who have exhausted their standard unemployment insurance benefits during periods of high unemployment.
The standard term of unemployment benefits is 26 weeks, but specific terms vary by state. For example, Arkansas law provided for up to 16 weeks of benefits as of 2025. Montana, on the other hand, paid up to 28 weeks of benefits.[7]
The following table identifies the maximum length and the range of unemployment insurance benefits by state as of 2025, according to the Center on Budget and Policy Priorities:[8]
| Length of unemployment benefits by state, 2025 | |||
|---|---|---|---|
| State | Maximum length of unemployment insurance benefits (weeks) | Minimum weekly benefits | Maximum weekly benefits |
| Alabama | 14 | $45 | $275 |
| Alaska | 26 | $56 - $128 | $370 - $442 |
| Arizona | 26 | $216 | $320 |
| Arkansas | 16 | $81 | $451 |
| California | 26 | $40 | $450 |
| Colorado | 26 | $25 | $675 (low formula) |
| Connecticut | 26 | $15 - $30 | $703 - $778 |
| Delaware | 26 | $20 | $400 |
| Florida | 12 | $32 | $275 |
| Georgia | 14 | $55 | $365 |
| Hawaii | 26 | $5 | $763 |
| Idaho | 21 | $72 | $532 |
| Illinois | 26 | $51 - $77 | $578 - $787 |
| Indiana | 26 | $37 | $390 |
| Iowa | 16 | $82 - $99 | $551 - $676 |
| Kansas | 16 | $140 | $560 |
| Kentucky | 12 | $39 | $626 |
| Louisiana | 26 | $35 | $275 to $284 |
| Maine | 26 | $94 - $164 | $538 - $941 |
| Maryland | 26 | $50 - $90 | $430 |
| Massachusetts | 30 | $55 - $87 | $1,015 - $1,522 |
| Michigan | 20 | $160 - $190 | $362 |
| Minnesota | 26 | $33 | $552 (based on HQW) |
| Mississippi | 26 | $30 | $235 |
| Missouri | 20 | $35 | $320 |
| Montana | 28 | $194 | $657 |
| Nebraska | 26 | $70 | $514 |
| Nevada | 26 | $16 | $562 |
| New Hampshire | 26 | $32 | $427 |
| New Jersey | 26 | $156 - $179 | $830 |
| New Mexico | 26 | $101 - $151 | $542 - $592 |
| New York | 26 | $124 | $504 |
| North Carolina | 12 | $15 | $350 |
| North Dakota | 26 | $43 | $673 |
| Ohio | 26 | $157 | $561 - $757 |
| Oklahoma | 16 | $16 | $493 |
| Oregon | 26 | $183 | $783 |
| Pennsylvania | 26 | $68 - $76 | $605 - $613 |
| Rhode Island | 26 | $66 - $116 | $680 - $850 |
| South Carolina | 20 | $42 | $326 |
| South Dakota | 26 | $28 | $487 |
| Tennessee | 26 | $30 | $275 |
| Texas | 26 | $72 | $563 |
| Utah | 26 | $41 | $712 |
| Vermont | 26 | $80 | $668 |
| Virginia | 26 | $60 | $378 |
| Washington | 26 | $317 | $999 |
| Washington, D.C. | 26 | $50 | $444 |
| West Virginia | 26 | $24 | $630 |
| Wisconsin | 26 | $54 | $370 |
| Wyoming | 26 | $40 | $560 |
See also
- Unemployment insurance
- Unemployment insurance fraud
- Unemployment insurance fraud recovery
- Unemployment taxes
- Unemployment Trust Fund
- Unemployment filings during the coronavirus (COVID-19) pandemic, 2020-2021
- State government plans to end federal unemployment benefits related to the coronavirus (COVID-19) pandemic, 2021
External links
Footnotes
- ↑ Patriot, "What Is My State Unemployment Tax Rate?" accessed March 12, 2025
- ↑ APS Payroll, "SUTA WAGE BASES," accessed March 12, 2025
- ↑ Paycom, "SUTA Tax Rate 2024: All You Need to Know," accessed March 12, 2025
- ↑ Dependent on employer's experience rating.
- ↑ 5.0 5.1 U.S. Department of Labor, "Report Unemployment Insurance Fraud," accessed May 20, 2021
- ↑ 6.0 6.1 Work It Daily, "Are You Committing Unemployment Insurance Fraud By Accident?" April 14, 2020
- ↑ Newsweek, "Map Shows States Where You Can Collect Unemployment the Longest" January 10, 2025
- ↑ Center on Budget and Policy Priorities, "Policy Basics: How Many Weeks of Unemployment Compensation Are Available?" April 4, 2025
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