1. TurboTax /
  2. Tax Calculators & Tips /
  3. Tax Tips Guides & Videos /
  4. Tax Relief /
  5. Unemployment Benefits Get Big Boost

Unemployment Benefits Get Big Boost

Updated for Tax Year 2009


The 2009 stimulus bill extends the period of time that workers who have lost their jobs can collect unemployment benefits.

While unemployment benefits normally run for 26 weeks—or until you get a new job—the new law extends jobless pay by as many as 33 weeks, for a total of as long as 59 weeks of coverage. The full 33-week extension applies in states with unemployment rates over 6.5 percent. Check with your state unemployment office to learn how long benefits run in your state.

You don’t have to make any special application for the increased $25-per-week benefit. The money should automatically be added to your checks. Although states set their own rules for the amounts that jobless workers receive, the weekly $25 boost applies in all 50 states and the District of Columbia.

Some benefits no longer taxed

In addition, the new law makes up to $2,400 of unemployment benefits tax-free. Previously, all unemployment was subject to taxes. The new break does not apply to jobless pay received in 2008, though. If you received unemployment compensation in 2008, your state should have sent you a Form 1099-G showing the amount paid. You should report that amount on your 2008 tax return.

And, note this: The decision to make jobless pay tax-free applies only to your federal income taxes. Congress can’t tell the states how to handle it and it’s unclear how many, if any, states will follow the fed’s lead.

If you're unemployed, you could qualify for an important new break that helps pay the cost of keeping your health insurance. See Health Insurance Assistance for Unemployed.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $60*
Start for Free

Looking for more information?