Tax Relief for the Unemployed

The American Recovery & Reinvestment Act (ARRA) has multiple provisions to help the unemployed.

Suspension of Federal Unemployment Benefit Taxes

For now, those who are jobless and receiving unemployment checks won't have to pay federal income tax on their first $2400 of benefits.  This is a not a permanent measure, but a temporary cessation to give the unemployed more money in their pockets and to stimulate the economy.

Other Provisions for the Jobless

• Unemployment Benefits: They usually last for 26 weeks, but an extension of an extra 33 weeks was passed in 2008 and was planned to expire in March.  The ARRA makes these extended unemployment benefits available through the duration of 2009.  In addition, weekly unemployment checks will be increased by $25 through 2009.
• Food Stamps: Maximum food stamp benefits will increase by 13%.
• Health Insurance: COBRA premiums will be subsidized. COBRA is a program that allows workers to continue their former employer's health coverage for up to 18 months, but in the past, the worker has been responsible for 110% of the employer's premium. The new subsidy will cover 65% of a person's COBRA health insurance premiums.