States Offering the New $300 Unemployment Benefit

10 states are offering or planning to offer a top up to unemployment benefits.

The President recently signed an executive action to restart additional unemployment benefits, after the $600 PUA top-up expired at the end of July.

The funds for the additional benefits are coming from the Federal Emergency Management Agency (FEMA), under a program called Lost Wages Assistance (LWA). States had to opt into the program, and those that did are now facing challenges in implementing this new payment. Here’s our full list of all the states that are offering this new benefit, and other factors you may need to know.

How much is the new LWA top-up?

$300 per week. States have the option of providing an extra $100, making it a $400 weekly top-up. But the extra $100 needs to come from state funds, and many states have stated that it would cost too much.

The top-up will be retroactive to August 1, 2020. That means even if you are now employed and no longer collecting unemployment benefits, you may be eligible for a LWA top-up payment for the period between August 1st and the day you regained employment.

How long will this last?

Each participating state will get funding to allow them to provide the $300 weekly top up payments for three weeks. States will then receive weekly funding until funds run out. Some analysts predict that funding will last until the end of August.

Who qualifies for the LWA top-up?

Individuals must qualify for at least $100 in weekly unemployment benefits to qualify for the LWA top-up. Find your state’s minimum and maximum weekly benefits in our free Unemployment Benefits guide.

Individuals must also certify that their unemployment or partial unemployment is caused by COVID-19 disruptions. If you qualified for PUA, you don’t need to certify again.

There’s no need to apply for the LWA. You will automatically receive it if the state determines you are eligible.

States approved for the LWA program

10 states are currently distributing the Lost Wages Assistance top-up:

  • Alabama - $300

  • Alaska - $300

  • District of Columbia - $300

  • Idaho - $300

  • Iowa - $300

  • Kansas - $400 (state providing $100)

  • Louisiana - $300

  • New Mexico - $300

  • North Dakota - $300

  • Wisconsin - $300

States that have depleted their LWA funds

The following states have used up their funds as allocated by FEMA and are no longer offering LWA:

  • Arizona

  • Arkansas

  • California

  • Colorado

  • Connecticut

  • Delaware

  • Florida

  • Georgia

  • Hawaii

  • Illinois

  • Indiana

  • Kentucky

  • Maine

  • Maryland

  • Massachusetts

  • Michigan

  • Minnesota

  • Mississippi

  • Missouri

  • Montana

  • Nebraska

  • Nevada

  • New Hampshire

  • New Jersey

  • New York

  • North Carolina

  • Ohio

  • Oklahoma

  • Oregon

  • Rhode Island

  • South Carolina

  • Pennsylvania

  • Tennessee

  • Texas

  • Utah

  • Vermont

  • Virginia

  • Washington

  • West Virginia

  • Wyoming

States not participating in the LWA program

One state has opted out of participating in the Lost Wages Assistance top-up:

  • South Dakota

States waiting for further guidance

The remaining states have not decided if they will proceed with the program, or have raised concerns about the implementation or cost:

  • Puerto Rico

My state was approved for the LWA program. When can I see my payment?

States are reporting difficulty setting up this new benefit in their systems. It may take several weeks before payments are sent. CNBC reports that so far, Arizona, Louisiana, Missouri, Tennessee and Texas have been able to send out LWA benefits.

Do I need to pay tax on the LWA top-up?

Yes, you will need to pay federal income tax on the top-up. Your state may give you the option to withhold a portion of your benefit, so you won’t have to pay as much tax at the end of the year.

Further reading: 2020 Taxes: How the PPP, EIDL, and PUA Will Affect Your Taxes

If I have a PPP loan, can I still qualify for the LWA top-up?

It’s possible, but generally no. Self-employed individuals who are claiming an owner compensation replacement from their PPP loan are required to report that as income. This would affect your eligibility for unemployment benefits. If the partial unemployment benefits you are eligible for are less than $100, you may not qualify. Your state will automatically determine this for you.

Learn more about partial unemployment benefits and how they affect you as a small business owner

What this means for your bookkeeping

Unemployment benefits are paid to the individual, so there’s no need to record unemployment benefit payments in your business’s books. Your benefits should be deposited into your personal account. If you use these personal funds for business purposes, it would be considered a capital or shareholder contribution, and it would affect your owner’s equity.

Wondering about the difference between personal and business bookkeeping? Find out more.

Need more help?

Get a free consultation with a Bench expert. We’ll walk you through every bookkeeping requirement of disaster relief funding, including what statements, records, and documents you need.

Then, we’ll have an in depth discussion about how a dedicated Bench bookkeeper can help you take advantage of these financial relief programs by bringing your books up to date—fast.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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