What Is Pandemic Emergency Unemployment Compensation (PEUC)?

Pandemic Emergency Unemployment Compensation (PEUC) is an emergency program designed to help Americans affected by the COVID-19 pandemic. 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.

Benefits under the PEUC program were due to expire on Dec. 31, 2020; however, the PEUC was 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.

In other words, an additional 40 weeks were added to the original 13 weeks of extended benefits. There are additional benefits for some qualified individuals, but it's important to check with your state to determine your eligibility for federal benefits.

Key Takeaways

  • The CARES Act created the Pandemic Emergency Unemployment Compensation (PEUC) program, extending unemployment insurance for 13 weeks to those who exhausted their benefits.
  • Although the benefits under the PEUC program were due to expire on Dec. 31, 2020, the PEUC has been extended through Sept. 6, 2021.
  • Also, under the PEUC, the total number of weeks that an individual can claim benefits has been increased from 13 to 53 weeks.
  • The Federal Pandemic Unemployment Compensation (FPUC) program also provides an additional $300 per week for unemployment beginning after Dec. 26, 2020, and ending on or before Sept. 6, 2021.
  • States are required to offer flexibility to applicants in meeting PEUC eligibility requirements related to "actively seeking work" if an applicant's ability to find work is affected by COVID-19.

Understanding Pandemic Emergency Unemployment Compensation (PEUC)

Because states and businesses have shuttered due to the COVID-19 crisis, millions of laid-off workers in the U.S. continue to depend on unemployment insurance (UI) to help cover rent, groceries, and other expenses. But what if you are already unemployed and your benefits have run out?

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 "are able to work, available to work, and actively seeking work."

As stated earlier, benefits under the PEUC program were due to expire Dec. 31, 2020, but were extended through Sept. 6, 2021, first as a result of the Consolidated Appropriations Act (CAA), 2021, and then by the American Rescue Plan. Currently, individuals can collect unemployment benefits for a total of 53 weeks (versus the original 13 weeks under the CARES Act).

Please note, however, that a total of 25 states have elected to end the $300 federal supplement early. The best way to confirm the status of your unemployment benefits is to check with your state's unemployment office. The Department of Labor lists the contact information for all fifty states' labor offices on its website.

Stimulus checks and other benefits for qualified individuals passed as part of the Consolidated Appropriations and American Rescue Plan Acts are not unemployment benefits and are administered by the U.S. Treasury Department.

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

Unemployment Programs in Response to the COVID-19 Pandemic

In addition to the PEUC program, the CARES Act extends unemployment benefits through two other initiatives: the Pandemic Unemployment Assistance (PUA) program and the Federal Pandemic Unemployment Compensation (FPUC) program.

Pandemic Unemployment Assistance (PUA)

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

You must provide self-certification that you’re able and available to work and that you’re unemployed, partially employed, or unable or unavailable to work due to a COVID-19-related situation.

Federal Pandemic Unemployment Compensation (FPUC)

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

The reauthorization means that an extra $300 per week will be automatically 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.

Income Tax Relief Under the American Rescue Plan Act

The American Rescue Plan Act of 2021 provides 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 applies to benefits received through both state and federal unemployment programs for individuals or couples with an adjusted gross income (AGI) of $150,000 or less in 2020.

Though many states have decided to mirror the federal exemption, CNBC reports that some are offering partial relief while others have decided to tax unemployment benefits. Check with your state tax authority to find out how it plans to treat unemployment benefits in regard to state taxes.

Outline of 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. Extends 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. Extends 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. Extends FPUC until Sept. 6, 2021.

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

If you have applied or are planning on applying for unemployment insurance under the Pandemic Unemployment Assistance (PUA) program, be sure to check with your state to determine when your last PUA payment will be issued.

How to Apply for PEUC

Anyone who has exhausted their regular unemployment compensation benefits can get an extra 29 weeks of benefits through the PEUC program.

To receive PEUC, you must be actively engaged in looking for work. However, the bill specifies that "a State shall provide flexibility in meeting such [work search] requirements in case of individuals unable to search for work because of COVID-19, including because of illness, quarantine, or movement restriction." Individual states will offer guidance on how to extend benefits through this program.

In addition to the weekly benefit amount you can receive under PEUC, you will also be eligible for $300 per week under the FPUC program beginning after March 14, 2021, and ending on or before Sept. 6, 2021. Please note, however, that a total of 25 states have elected to end their participation in the FPUC program early, before the Sept. 6 deadline. The best way to confirm the status of your unemployment benefits is to check with your state's unemployment office. The Department of Labor lists the contact information for all fifty states' labor offices on its website.

A "nonreduction" rule in the CARES Act prevents states from doing anything to decrease the maximum number of weeks of unemployment insurance or the weekly benefits available under state law as of Jan. 1, 2020.

Special Considerations

Federal law allows considerable flexibility for states to amend their laws to provide unemployment insurance benefits in several COVID-19-related situations. States can, for instance, pay benefits when:

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

Under federal law, an employee doesn't have to quit to receive benefits due to COVID-19.

To find out the rules in your state, check with your state's unemployment insurance program.