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.
- 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) of 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.
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 programs also expired on Sept. 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.
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.
The Bottom Line
In response to the unprecedented COVID-19 pandemic, which forced businesses to close and workers to stay home, governments around the world implemented emergency measures and financial stimulus in order to blunt the economic impact. In the U.S., Pandemic Emergency Unemployment Compensation (PEUC) was authorized under the CARES Act, extending unemployment benefits by up to 53 weeks after regular unemployment ran out. The program, which began in Mar 2020, was well-utilized but expired in September of 2021.
U.S. Congress. "H.R. 748 - CARES Act, Sec. 2102," Pages 33-37.
NY Department of Labor. "Expiration of Federal Unemployment and Pandemic Benefits."
U.S. Department of Labor. "U.S. Department of Labor Announces New Guidance to States on Unemployment Insurance Programs."
U.S. Department of Labor. "Unemployment Insurance Relief During COVID-19 Outbreak."
U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021," Page 115.
U.S. Congress. "H.R. 133 - Consolidated Appropriations Act, 2021," Page 773.
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."
CNBC. “4 Steps to Take Now That Pandemic Unemployment Insurance Programs Have Expired."
U.S. Department of Labor. "U.S. Department of Labor Publishes Guidance on Pandemic Unemployment Assistance."
U.S. Department of Labor. "U.S. Department of Labor Publishes Guidance on Federal Pandemic Unemployment Compensation."
U.S. Congress. "H.R. 748—CARES Act."
U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021," Page 116.
U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021," Pages 115 and 116.
U.S. Congress. "H.R.1319 - American Rescue Plan Act of 2021," Page 119.
U.S. Congress. “H.R.6074 - Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020.”
CNBC. "25 Million People got Unemployment Benefits in 2021. They Won't Be Gettng a Tax Break."
The Impact of Coronavirus Relief Bills on Your Finances
The Quickest Way to Get Your Next Stimulus Check
Recovery Rebate Credit
How Far Do the Stimulus Checks Really Go?
How to Manage Credit Card Payments During COVID-19
How to Get COVID-19 Student Loan Relief
How and Where to Get COVID-19 Financial Help
How Banks Are Helping Those Impacted by COVID-19
Lost Your Health Insurance? Here's What to Do
Does Life Insurance Cover Pandemics?
Should COVID-19 Change Your Retirement Strategy?
Renters: How to Get Rent Relief
How to Get Help From the Mortgage Relief Program
How to Get a COVID-19 Mortgage Forbearance Extension
What Is Pandemic Unemployment Assistance (PUA)? How It Works
Pandemic Emergency Unemployment Compensation (PEUC) During Covid
Federal Pandemic Unemployment Compensation (FPUC): An Overview
Lost Wages Assistance (LWA) Program
How to Reopen Your Small Business Safely
What Is the Employer Payroll Tax Deferral Provision?
For Many Retailers, Rent Relief Is Key to Surviving COVID-19
The End of the Employee Retention Credit: How Employers Should Proceed
Does Business Interruption Insurance Cover COVID-19?
What Was Third-Round Paycheck Protection Program (PPP) Funding?
Which COVID-19 Loans Are Forgivable and How To Get Your Loan Forgiven
Applying for a COVID-19 Economic Injury Disaster Loan (EIDL) by the Dec. 31 Deadline