Eligibility for Unemployment

• In order to qualify for unemployment benefits, you must be unemployed due to no fault of your own. This means that you were laid off because of cutbacks at work. You will not qualify for unemployment if you quit without a valid reason or you were fired for insubordination. Also, you are not eligible for unemployment if you left to get married, go to school or you are participating in a strike. When applying for unemployment benefits, you will be asked the reason for the loss of your job. Be aware that the unemployment agency might contact your former employer to verify the reason for your termination.
  
  

Other Income

• If you receive income from another source or if you are self-employed, you will either not be able to collect unemployment, or the amount of your unemployment payment will be reduced based on the amount of income you make. As an example, if you get laid off and then secure a part-time job, the income you receive from your part-time job will reduce your unemployment benefits. You are required to submit proof of your earnings weekly or monthly while you are collecting unemployment benefits.
  
  

Duration of Unemployment Benefits

• If you are eligible for unemployment, you can collect for a maximum of 26 weeks in most states. During times of high unemployment, the maximum length of unemployment benefits might be increased up to an additional 13 weeks. While you are collecting unemployment, you must be actively looking for work. Many states require you to submit proof that you are seeking employment every week or month.
  
  

Taxes

• You are required to pay federal income tax on your unemployment benefits. Unemployment benefits are classified as income and taxed at your personal income tax rate. Also, some states require their residents to pay state income tax on unemployment benefits. Taxes are generally not withheld from your unemployment benefits, so it is important to plan and save a portion of your unemployment payments to pay your income taxes.
  
  

Tip

• There is no shame in collecting unemployment benefits. While you were employed, you were paying into your state's unemployment benefits program through deductions from your paycheck. Unemployment benefits should be taken advantage of in order to help you get through this difficult period in your career.