Unemployment Insurance Provisions in the American Rescue Plan Act of 2021

Unemployment Insurance Provisions in the American Rescue Plan Act of 2021

Updated March 17, 2021
Unemployment Insurance Provisions in the American Rescue
Plan Act of 2021
The Unemployment Insurance (UI) provisions in Title IX,
Federal Pandemic Unemployment Compensation
Subtitle A, of the American Rescue Plan Act of 2021
Originally authorized under the CARES Act at $600 per
(ARPA; P.L. 117-2; enacted March 11, 2021) make four
week, FPUC is a weekly UI benefit augmentation that
significant changes to UI programs and benefits—
initially expired on July 25, 2020 (July 26, 2020, in New
specifically, ARPA
York; for subsequent UI benefit expiration dates provided
below, the benefit expiration date in New York falls one
 reauthorizes and expands the enhanced UI benefits
calendar day later, which is due to that state’s definitions of
created under the Coronavirus Aid, Relief, and
week ). After this expiration, on August 8, 2020, former
Economic Security Act (CARES Act; P.L. 116-136,
President Trump issued a presidential memorandum
enacted March 27, 2020) and the Consolidated
creating Lost Wages Assistance, a grant program that
Appropriations Act, 2021 (P.L. 116-260, enacted
supplemented the weekly benefits of certain eligible UI
December 27, 2020; the UI provisions are titled the
claimants with up to $300 weekly in federal funding. All
Continued Assistance for Unemployed Workers Act of
states ended Lost Wages Assistance payments by
2020 [Continued Assistance Act]);
September 5, 2020. The Continued Assistance Act
reauthorized FPUC at $300 per week for weeks of
 extends the authorization for additional, temporary UI
unemployment beginning after December 26, 2020, and
provisions first authorized under the CARES Act and
ending on or before March 14, 2021.
the Families First Coronavirus Response Act (FFCRA;
P.L. 116-127, enacted March 18, 2020) and extended
ARPA extends the Continued Assistance Act’s
under the Continued Assistance Act;
reauthorization of FPUC at $300 per week through weeks
of unemployment ending on or before September 6, 2021.
 authorizes a federal income tax exclusion of up to
After September 4, 2021, no FPUC benefits are payable.
$10,200 in UI benefits in 2020 for taxpayers with
modified adjusted gross income (AGI) of less than
Pandemic Emergency Unemployment
$150,000; and
Compensation
PEUC provides additional weeks of federally financed UI
 provides two sources of additional UI administrative
benefits for individuals who exhaust state and federal UI
funding: (1) $2 billion to U.S. Department of Labor
benefits and are able, available, and actively seeking work,
(DOL) for federal and state administration of UI
subject to flexibilities related to Coronavirus Disease 2019
benefits, including for fraud prevention and benefit
(COVID-19). PEUC was originally created as a 13-week UI
processing purposes; and (2) $8 million to DOL for
extension under the CARES Act and payable through
federal activities related to UI programs .
weeks of unemployment ending December 26, 2020.
For additional information on UI programs and benefits, see
The Continued Assistance Act subsequently authorized 11
CRS Report R46687, Current Status of Unemployment
additional weeks of PEUC benefits (for a total of 24 weeks;
Insurance (UI) Benefits: Permanent-Law Programs and
the additional weeks were only payable beginning
COVID-19 Pandemic Response.
December 26, 2020) and extended the authorization for
PEUC through weeks of unemployment ending on or before
For information on federal taxation of UI benefits, see CRS
March 14, 2021.
In Focus IF11782, Federal Taxation of Unemployment
Insurance Benefits.
The American Rescue Plan Act
Reauthorized and Expanded Federal UI
 authorizes 29 additional weeks of PEUC benefits (not
Benefits
retroactive; only payable with respect to weeks of
The UI provisions in ARPA reauthorize and expand the
unemployment beginning March 14, 2021); and
four temporary UI benefits created under the CARES Act
and the Continued Assistance Act: Federal Pandemic
 extends the authorization for PEUC through weeks of
Unemployment Compensation (FPUC), Pandemic
unemployment ending on or before September 6, 2021;
Emergency Unemployment Compensation (PEUC),
no PEUC benefits are payable after September 4, 2021.
Pandemic Unemployment Assistance (PUA), and Mixed
Earned Unemployment Compensation (MEUC).
The new PEUC expiration date effectively limits PEUC
benefits to no more than an additional 25 weeks and a
cumulative total of 49 weeks.
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Unemployment Insurance Provisions in the American Rescue Plan Act of 2021
Pandemic Unemployment Assistance
benefits through temporary assistance for states with
PUA is a temporary, federal UI program for individuals
advances;
who are (1) not otherwise eligible for UI benefits (e.g., self-

employed, independent contractors, gig economy workers);
100% federal funding of Extended Benefits (EB);
(2) unemployed due to a specific COVID-19-related reason;
 100% federal funding for the first week of UI benefits in
and (3) not able to telework and are not receiving any paid
states with no waiting week (originally 100% federal
leave.
funding under CARES Act, then 50% funding under the
Continued Assistance Act; restored 100% federal
Under the CARES Act, PUA provided up to 39 weeks of
funding under ARPA is retroactive and applies as if the
benefits for weeks of unemployment ending December 26,
reduction to 50% funding had not occurred);
2020. The Continued Assistance Act subsequently
authorized 11 additional weeks of PUA benefits (for a total
 75% federal funding of state UI benefits based on
of 50 weeks; the additional weeks were only payable
service with reimbursing employers (i.e., state and local
beginning December 26, 2020) and extended the
governments, Indian tribes, and nonprofit organizations,
authorization for PUA through weeks of unemployment
including the Kennedy Center, that have opted not to
ending on or before March 14, 2021.
pay UI taxes but instead reimburse states for regular UI
benefits paid to their former employees ; previously 50%
The American Rescue Plan Act
federal funding under the CARES Act and the
Continued Assistance Act—75% funding begins for
 authorizes 29 additional weeks of PUA benefits (not
weeks of unemployment after March 31, 2021);
retroactive; only payable with respect to weeks of
 100% federal financing of Short-Time Compensation
unemployment beginning March 14, 2021); and
(STC; work sharing) in states with existing programs

and 50% federal financing for states that set up STC
extends the authorization for PUA through weeks of
programs (up to the equivalent of 26 weeks of benefits
unemployment ending on or before September 6, 2021;
for individuals); and
no PUA benefits are payable after September 4, 2021.
 waiver of federal requirements regarding merit staffing
The new PUA expiration date effectively limits PUA
for state UI programs on an emergency, temporary basis
benefits to no more than an additional 25 weeks and a
in response to COVID-19 (limited to certain temporary
cumulative total of 75 weeks.
actions taken by states to quickly process UI claims,
including rehiring former employees and temporary
Mixed Earner Unemployment Compensation
hiring).
The Continued Assistance Act created a $100-a-week
MEUC payment in addition to the $300-a-week FPUC
UI Tax Exclusion for 2020
benefit in states that elect to participate. MEUC provides
ARPA allows taxpayers to exclude up to $10,200 in UI
$100 weekly for individuals who received at least $5,000 in
benefits from income in 2020 for the purposes of federal
self-employment income in the most recent tax year (i.e.,
income, for taxpayers with modified AGI of less than
ending prior to the individual’s application for state UI
$150,000. The $150,000 AGI threshold applies regardless
benefits) and receive a UI benefit other than PUA. Under
of the taxpayer’s filing status (i.e., married filing jointly,
the Continued Assistance Act, MEUC was payable only in
single, or head of household).
states that opt to administer the benefit for weeks of
unemployment beginning on or after December 27, 2020,
Additional UI Administrative Funding
and ending on or before March 14, 2021.
ARPA provides $2 billion in additional UI administrative
funding to DOL in FY2021 to “detect and prevent fraud,
ARPA extends the authorization of the $100-a-week
promote equitable access, and ensure the timely payment of
MEUC payment in participating states for weeks of
benefits.” This funding is available until expended and may
unemployment ending on or before September 6, 2021.
be used for (1) federal administrative costs, (2) system-wide
After September 4, 2021, no MEUC benefits are payable.
infrastructure, and (3) grants to states and territories
Extensions of Additional UI Provisions
administering all UI benefits for program integrity and
ARPA extends the temporary authority for additional UI
fraud prevention purposes, including for identity
provisions first authorized under FFCRA (P.L. 116-127)
verification and faster claims processing.
and the CARES Act (P.L. 116-136) and subsequently
reauthorized under the Continued Assistance Act. The
ARPA also provides an additional $8 million to DOL in
authorities for the following UI provisions are generally
FY2021, available until expended, for necessary expenses
extended through September 6, 2021 (or for weeks of
to carry out federal activities related to the administration of
unemployment ending on or before September 6, 2021 (i.e.,
UI programs.
through September 4, 2021):
Katelin P. Isaacs, Specialist in Income Security
 waiver of interest payments and the accrual of interest
Julie M. Whittaker, Specialist in Income Security
on federal advances (loans) to states to pay regular UI
IF11786

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Unemployment Insurance Provisions in the American Res cue Plan Act of 2021

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https://crsreports.congress.gov | IF11786 · VERSION 3 · UPDATED