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What the CARES Act Unemployment Programs Included

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a federal law passed in March 2020 to help people affected by the COVID-19 pandemic. Congress created three temporary unemployment programs under this law to reach workers who might not have been covered by regular state unemployment insurance. Understanding what these programs were and how they worked is important for anyone who received payments during 2020 and 2021, because it affects how you report this income on taxes and understand your payment records.

The three main programs were:

• Pandemic Unemployment Assistance (PUA) — This program covered self-employed workers, gig workers, independent contractors, and other people who typically wouldn't qualify for regular unemployment insurance. PUA provided up to 39 weeks of payments starting in 2020.
• Pandemic Emergency Unemployment Compensation (PEUC) — This program extended benefits for people who had used up their regular state unemployment insurance. It added up to 13 weeks of additional payments.
• Federal Pandemic Unemployment Compensation (FPUC) — This program added an extra $600 per week to all unemployment payments (both regular and the two programs above) from March through July 2020, and then $300 per week from December 2020 through September 2021.

During 2020 and 2021, more than 20 million Americans received payments through these programs at various times. The total amount distributed exceeded $800 billion. These were temporary programs that ended in September 2021, so no new claims can be filed under them.

Practical takeaway: If you received unemployment payments during 2020 or 2021, identifying which program(s) you received from helps you understand your payment history and prepare tax documents.

How Pandemic Unemployment Assistance (PUA) Worked

Pandemic Unemployment Assistance was created because regular state unemployment insurance systems typically don't cover self-employed people, gig economy workers, or others without traditional employer relationships. Before the CARES Act, someone driving for a rideshare service or running a small freelance business wouldn't be able to receive unemployment benefits if their income stopped. PUA changed this for the duration of the pandemic emergency.

To receive PUA, people had to show they lost income or couldn't work because of COVID-19. This included situations like:

• A person's main client canceled all projects due to lockdowns
• A freelancer couldn't work because childcare closed and they had to supervise children at home
• A rideshare driver stopped working because of health concerns related to COVID-19
• A contractor's work sites were closed by government order
• A business owner closed their operation temporarily due to pandemic restrictions

PUA paid a weekly benefit amount calculated based on the person's prior income from self-employment or gig work. The program ran from January 2020 through September 2021. At its peak in 2021, approximately 7.2 million people were receiving PUA payments in a single week. Individual weekly payments ranged from about $159 to $504 per week, depending on each person's reported prior income and their state's calculation method.

One important detail: people who received PUA sometimes faced questions or audits afterward. Some states required people to provide documentation of their prior income, like tax returns, bank statements, or business records. This happened because the PUA program worked quickly during the emergency, and some verification happened after payments were made.

Practical takeaway: If you received PUA payments, keeping records of how you reported your prior income is useful, because you may be asked to verify that information later.

How Pandemic Emergency Unemployment Compensation (PEUC) Extended Benefits

Pandemic Emergency Unemployment Compensation was designed for a specific group: people whose regular state unemployment insurance had run out. In normal times, state unemployment benefits typically last 26 weeks. When someone used up all 26 weeks of benefits during the pandemic, they would normally stop receiving payments. PEUC stepped in to provide additional weeks of payment during the emergency.

The program provided up to 13 additional weeks of benefits at the same weekly amount a person was already receiving from their state's regular unemployment program. PEUC started in March 2020 and continued through September 2021. The number of available weeks changed over time as Congress extended the program multiple times. At some points in 2020 and 2021, the program offered more weeks when it was extended again.

Here's a practical example: Imagine a person received regular state unemployment benefits of $300 per week for 26 weeks, using up their full benefit year. Without PEUC, they would stop receiving payments. With PEUC, they could receive another $300 per week (plus the $600 or $300 federal boost if FPUC was active) for up to 13 additional weeks. This meant someone could potentially receive nearly 39 weeks of payments instead of just 26.

About 5 to 6 million people per week received PEUC payments at the program's peak. The program was especially important in 2021, when many people who had lost work in 2020 were still unable to return to jobs. Some people cycled between regular state benefits and PEUC multiple times if they returned to work briefly and then lost employment again.

PEUC ended on September 6, 2021, along with the other federal pandemic programs. This meant that millions of people's unemployment payments stopped at that time, whether or not they had found new work.

Practical takeaway: If you received PEUC, understanding when those payments occurred helps you match them to your records and know which benefits to report on taxes.

Understanding the Federal Boost Payments (FPUC)

The Federal Pandemic Unemployment Compensation program added extra federal money on top of whatever someone was already receiving from state unemployment, PUA, or PEUC. This boost was not a separate program you had to apply for separately — if you were receiving any unemployment payment, the FPUC boost was typically added automatically.

The boost amount changed twice during the programs' duration:

• March 27, 2020 through July 25, 2020: An extra $600 per week was added to all unemployment payments. Someone receiving $300 in state benefits would get $900 total per week.
• August 1, 2020 through March 13, 2021: The boost ended temporarily. No extra federal money was added during these weeks.
• March 14, 2021 through September 6, 2021: An extra $300 per week was added to all unemployment payments.

The $600-per-week boost was substantial. In just one week, someone could receive more than many people earn in a month of work. Over the five-month period from late March through July 2020, a person receiving $300 in state benefits would receive an additional $3,000 in federal boost payments. This federal money was intended to provide economic relief and help people pay for essentials while unable to work.

At the program's height in 2021, approximately 18 million people per week were receiving some form of unemployment payment, most with the $300 FPUC boost included. The total amount paid through FPUC exceeded $500 billion across both boost periods.

One important factor: the boost payments were subject to federal income tax, just like regular unemployment benefits. Someone who received $4,800 in boost payments over the summer of 2020 would need to report that as taxable income on their 2020 tax return. This sometimes caught people by surprise when they received tax bills or smaller refunds than expected.

Practical takeaway: The boost payments were extra money added automatically, but they were taxable income — so keeping records of total unemployment received (including the boost) is essential for accurate tax reporting.

What Records You Should Keep About Your CARES Act Payments

If you received any unemployment payments through PUA, PEUC, or