Pandemic Emergency Unemployment Compensation (PEUC)

What Was Pandemic Emergency Unemployment Compensation (PEUC)?

Pandemic Emergency Unemployment Compensation (PEUC) was an emergency program designed to help Americans affected by the COVID-19 pandemic by extending the number of weeks the unemployed could collect benefits. It was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion coronavirus emergency stimulus package signed into law by former President Trump on March 27, 2020.

After a series of extensions, the program expired on September 6, 2021. In total, an additional 40 weeks were added to the original 13 weeks of extended benefits.

Key Takeaways

  • The CARES Act established the Pandemic Emergency Unemployment Compensation (PEUC) program to help workers impacted by the COVID-19 pandemic.
  • PEUC extended the number of weeks the unemployed could collect benefits.
  • After several extensions, PEUC extended unemployment insurance by up to 53 weeks.
  • The PEUC program ended on Sept. 6, 2021.


Understanding Pandemic Emergency Unemployment Compensation (PEUC)

The CARES Act established the Pandemic Emergency Unemployment Compensation (PEUC) program to allow people who had exhausted their unemployment compensation benefits to receive up to 13 additional weeks of benefits, provided they were "able to work, available to work, and actively seeking work."

Benefits under the PEUC program were due to expire on Dec. 31, 2020 but were extended to March 14, 2021, and the number of weeks that an individual could claim PEUC benefits was increased from 13 to 24 by the Consolidated Appropriations Act (CAA), 2021. The American Rescue Plan Act of 2021 further extended the PEUC 29 weeks for up to 53 weeks through Sept. 6, 2021.

States were required to offer flexibility to applicants in meeting PEUC eligibility requirements related to "actively seeking work" if an applicant's ability to find work was affected by COVID-19. Individual states offered guidance on reporting requirements. Some states, for example, allowed you to answer "Yes" to the question: "Did you look for work?" if you filed due to COVID-19 and didn't actually look for work.

3.8 million

The number of people who lost PEUC benefits when the program expired on Labor Day weekend in September 2021.

Unemployment Programs Created By the Cares Act

In addition to the PEUC program, the CARES Act extended unemployment benefits through two other initiatives: the Pandemic Unemployment Assistance (PUA) program and the Federal Pandemic Unemployment Compensation (FPUC) program. Both also expired on September 6, 2021.

Pandemic Unemployment Assistance (PUA)

Pandemic Unemployment Assistance (PUA) was a program that temporarily expanded unemployment benefits eligibility to self-employed workers, freelancers, independent contractors, gig workers, and part-time workers impacted by the coronavirus pandemic in 2020 and 2021. PUA was designed for workers who were not typically eligible for unemployment insurance benefits. The program was extended, most recently by the American Rescue Plan, and expired on Sept. 6, 2021. It had originally been set to expire on Dec. 31, 2020.

Those eligible for PUA had to provide self-certification that they were able and available to work and were unemployed, partially employed, or unable or unavailable to work due to a situation related to COVID-19.

Federal Pandemic Unemployment Compensation (FPUC)

The Federal Pandemic Unemployment Compensation (FPUC) program provided an additional $600 weekly to unemployment benefits, but the benefit expired on July 31, 2020. However, in late December 2020, FPUC was modified and extended as part of the CAA and later by the American Rescue Plan Act to provide an additional $300 per week in benefits. The funds were available for any weeks of unemployment beginning after Dec. 26, 2020, and ending on or before Sept. 6, 2021.

The reauthorization meant that an extra $300 per week would automatically be added to unemployment benefits. However, the new FPUC additional benefit was not payable during the gap from July 31, 2020, to Dec. 26, 2020. In other words, the $600 in extra money that was added to unemployment benefits ended on July 31, 2020, and the $300 didn't kick in until after Dec. 26, 2020.

Unemployment Programs in Response to the Coronavirus Pandemic
Program CARES Act Consolidated Appropriations Act American Rescue Plan Act
Pandemic Emergency Unemployment Compensation (PEUC) Extends benefits for 13 weeks after regular unemployment compensation benefits are exhausted. Extended PEUC to 24 weeks. Expired March 14, 2021. Extended PEUC to 53 weeks until Sept. 6, 2021.
Pandemic Unemployment Assistance (PUA) Extends benefits to self-employed, freelancers, and independent contractors.  Extended PUA to March 14, 2021. Extended PUA until Sept. 6, 2021.
Federal Pandemic Unemployment Compensation (FPUC) Provided a federal benefit of $600 per week: Expired July 31, 2020. Added $300 per week until March 14, 2021. Extended FPUC until Sept. 6, 2021.


Sources: H.R. 748, U.S. Department of Labor, H.R. 1319

Income Tax Relief Under the American Rescue Plan Act

The American Rescue Plan Act of 2021 provided additional relief to middle- and lower-income taxpayers by waiving federal income taxes on the first $10,200 of unemployment benefits received in 2020. This relief applied to benefits received through both state and federal unemployment programs for individuals or couples with a modified adjusted gross income (MAGI) of $150,000 or less in 2020.

States could choose to conform to the federal exemption or require that all taxes be paid. Several states did not conform to the federal exemption, but they already had laws that provide either full or partial unemployment compensation tax breaks.

As of January 2022, no federal income tax break for unemployment earnings has been announced for the 2021 tax year.

Special Considerations

States were allowed considerable flexibility to amend their laws to provide unemployment insurance benefits in several COVID-19-related situations. They could choose to pay benefits, for example, when:

  • An employer temporarily closed due to COVID-19, preventing employees from going to work
  • A person was quarantined and anticipated going back to work after the quarantine was over
  • A person stopped working due to a risk of COVID-19 exposure or infection, to care for a family member, or to home-school their children

Who Was Eligible for Pandemic Emergency Unemployment Compensation (PEUC)?

Anyone who had exhausted their regular unemployment compensation benefits was eligible to receive additional weeks of benefits through the PEUC program. Eligibility also required that you actively look for work unless you were unable to because of COVID-19.

What’s the Difference Between PEUC and FPUC?

The Pandemic Emergency Unemployment Compensation (PEUC) program extended benefits by up to 53 weeks after regular unemployment compensation benefits were exhausted. The Federal Pandemic Unemployment Compensation (FPUC) program provided additional unemployment benefits—$600 weekly until July 31, 2020 and $300 a week from Dec. 26, 2020 until Sept. 6, 2021.

Will There Be An Unemployment Income Tax Break in 2021?

If you received unemployment in 2020, $10,200 of unemployment compensation ($20,400 for married couples filing jointly) was tax-free at the federal level for anyone earning less than $150,000. As of January 2022, no such tax break has been announced for the 2021 tax year.


Article Sources
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  1. U.S. Congress. "H.R. 748 - CARES Act, Sec. 2102." Pages 33-37. Accessed Jan. 17, 2022.

  2. NY Department of Labor. "Expiration of Federal Unemployment and Pandemic Benefits." Accessed Jan. 17, 2022.

  3. U.S. Department of Labor. "U.S. Department of Labor Announces New Guidance to States on Unemployment Insurance Programs." Accessed Jan. 17, 2022.

  4. U.S. Department of Labor. "Unemployment Insurance Relief During COVID-19 Outbreak." Accessed Jan. 17, 2022.

  5. U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021." Page 115. Accessed Jan. 17, 2022.

  6. U.S. Congress. "H.R. 133 - Consolidated Appropriations Act, 2021." Page 773. Accessed Jan. 17, 2022.

  7. 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 Jan. 17, 2022.

  8. CNBC. “4 Steps to Take Now That Pandemic Unemployment Insurance Programs Have Expired.” Accessed Jan. 17, 2022.

  9. U.S. Department of Labor. "U.S. Department of Labor Publishes Guidance on Pandemic Unemployment Assistance." Accessed Jan. 17, 2022.

  10. U.S. Department of Labor. "U.S. Department of Labor Publishes Guidance on Federal Pandemic Unemployment Compensation." Accessed Jan. 17, 2022.

  11. U.S. Congress. "H.R. 748—CARES Act." Accessed Jan. 17, 2022.

  12. U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021." Page 116. Accessed Dec. 21, 2021.

  13. U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021." Page 115 and 116. Accessed Jan. 17, 2022.

  14. U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021." Page 119. Accessed Jan. 17, 2022.

  15. U.S. Congress. “H.R.6074 - Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020.” Accessed Jan. 17, 2022.

  16. Cnbc.com. "25 Million People got Unemployment Benefits in 2021. They Won't Be Gettng a Tax Break." Accessed Jan. 17, 20221.

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