The Skinny on Unemployment Insurance

What is Unemployment Insurance?

Unemployment insurance is program where money is paid by employers to be used for payments to workers during times of unemployment which are beyond the worker's control such as if the worker is laid off due to company downsizing.

If you are a worker who is eligible for unemployment benefits, you will receive part, but not all of your wages. This is a way to help pay the bills should you become unemployed. You may also be eligible for unemployment benefits if you are working less than full time and are ready, willing and able to work.

Am I Eligible for Unemployment Insurance?

Since unemployment insurance is a Federal and State program, the eligibility requirements and length of time you must be employed by an employer are determined at the state level.

If you become unemployed, contact the State Unemployment Insurance Agency for your state.

What Benefits Will I Get?

Usually, benefits are based upon a percentage of an individuals earnings over a recent 12 month period up to a State maximum amount. In most states, benefits can be paid for a maximum of 26 weeks, or a six month period of time, although additional weeks of benefits may be available during times of high unemployment.

Understand that benefits are taxable income, and they must be reported on your Federal income tax return. If you wish, you may have the tax withheld by the State Unemployment agency so you don't have to pay a lump sum at tax time.