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Unemployment Benefits

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a $260 billion in Unemployment Insurance benefits to match the average paycheck of laid-off or furloughed workers, an additional 13 weeks of federally-funded benefits in all states for workers who exhaust regular benefits and provide a temporary Federal Pandemic Unemployment Compensation (FPUC) of $600 a week for any worker eligible for state or federal unemployment compensation (UC) benefits.

Relief for Employees Overview

  • Employees affected by COVID-19 and eligible for state or federal pandemic unemployment compensation (FPUC) benefits will receive an additional $600 per week until July 31, 2020.
  • The FPUC combined with the underlying state unemployment benefits will replace 100 percent of wages for the average U.S. worker.
  • This also expanded eligibility to cover self-employed and “gig economy” works who cannot work due to COVID-19.
  • Full federal funding for short-term compensation programs, allowing struggling employers to enter into agreements with state UC programs to reduce employee hours, but still give employees partial UC for the lost hours.

Starting Monday, April 20, the Employment Development Department (EDD) will operate seven days a week from 8:00 a.m. to 8:00 p.m. The Unemployment Insurance Branch will be staffed with 1,340 employees, including 740 EDD employees and 600 employees from across state government. Find a step-by-step guide on how to apply here

The Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act provide benefits to self-employed individuals, independent contractors, “gig economy” employees, and individuals who were unable to start a new job or contract due to the pandemic.

Credit Against Self-Employment Tax

  • Self-employed workers and independent contractors can claim a credit against their self-employment taxes for missed work if they otherwise would have been eligible for family medical leave or paid sick leave had they worked for someone else.
  • For the family leave credit, self-employed individuals can receive a credit of either $200 per day or 67% of their average daily self-employment income, whichever is less, for up to 50 days (maximum of $10,000).
  • For the paid sick leave credit, the credit is the lesser of $511/day or the average daily self-employment income. It is available for up to 10 days (maximum $5,110). 
    • Average daily self-employment income is equal to the net earnings from self-employment for the taxable year divided by 260.
  • Self-employed individuals must maintain documentation to support their eligibility for the credits, as outlined by the Secretary of Treasury.

Paycheck Protection Program

  • The CARES Act provides $349 billion in assistance through federally guaranteed loans to small businesses of 500 employees or less.
  • Independent contractors and other self-employed individuals, i.e. gig workers and freelancers, are eligible for this program.
  • Loans can contribute to general business purposes, such as payroll costs, mortgage and rent payments, and utility payments; as well as:
    • payment for vacation, parental, family, medical, or sick leave;
    • severance payments;
    • payment for group health care benefits;
    • or payment of retirement benefits.
  • The maximum loan amount is either $10 million or two-and-a-half months’ payroll, whichever is less.

Emergency EIDL Grants

  • Small business owners, including self-employed individuals and independent contractors, can receive a $10,000 advance on an Emergency Economic Injury Disaster Loan (EIDL) that does not have to be paid back – even if the borrower does not qualify for a Small Business Administration loan.
  • Applicants will be approved based on their credit score; submitting a tax return is not required.
  • Loans can be used to:
    • provide paid sick leave to employees unable to work due to the COVID–19;
    • maintain payroll during substantial business slowdowns;
    • meet the increased costs of materials due to interrupted supply chains; make rent or mortgage payments; and
    • repay obligations that cannot be met due to revenue losses.

Disaster Unemployment Assistance

  • Workers who are not normally eligible for unemployment benefits can now access Disaster Unemployment Assistance so long as their unemployment was connected to the COVD-19 pandemic, as determined by the state and the Department of Labor.
  • Expanded eligibility would provide benefits to self-employed individuals, independent contractors, “gig economy” employees, and individuals who were unable to start a new job or contract due to the pandemic.
  • For information on how you can file a claim over the phone or by mail click here and read more about this here. There is not yet an online portal to file a claim online.

Don’t see an answer to your question? You can read more here or contact my Palm Desert Office at (760) 424-8888.