Current Unemployment Claim Surge Eclipses Historical Data

Unemployment Claims

Since the coronavirus pandemic started, the eligibility requirements for unemployment benefits have changed. If you are unemployed during this time, check with your state unemployment office or visit The Unemployments Benefits Finder to file for unemployment benefits online to avoid long hold times or constant busy signals by phone.

The CARES Act also provides some unemployment benefits to people who are self-employed and out of work due to the pandemic and quarantine. Self-employed individuals are usually not eligible for unemployment benefits.

Don’t Forget About the IRS.
They Won’t Forget You.

If you are able to collect benefits, note that money you receive as unemployment is taxable and you will have to claim benefits as income on your 2020 tax return.

In some states, you may opt to have 10% of your unemployment check withheld to cover the tax obligations. If not, or you opt not to do that, be sure to keep accurate records for your tax professional.

The Government Recognizes the COVID-19 Pandemic is Unprecedented

The graph below shows US unemployment statistics over time.

Unemployment claims today dwarf even the worst economic times in history.

However, unlike recessions and the economic depression of the past, we know the coronavirus pandemic and quarantine conditions can not and will not last forever.

President Trump is now wrestling with when exactly to reopen the economy, calling this one of the most important decisions of his life.

At some point, and hopefully sooner rather than later, the US economy will reopen and business and life will slowly return to normal, or the “new normal”, based on what you believe.

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Markets See Gains As Some States Gradually Reopen

New Unemployment Claims Make Old Records Look Pale in Comparison

Prior to coronavirus, you have to go back to 1982 to find a record number of new unemployment insurance claims in a week. Back then 700,000 new claims in one week set the record, which was unbroken until COVID-19 saw 6.9 million new jobless claims for the week ending March 28. For the week ending April 4, the US Department of Labor saw another 6.6 million initial claims.

It can be argued that part of the rise in unemployment claims consists of people who are self-employed and normally would not be eligible for unemployment benefits. With more people eligible, jobless claims were certain to rise from that reason alone.

On the flip side of the coin, many people who are out of work due to the coronavirus have not yet been able to file or have not had their claims processed because of the extreme system overload.

Claims will continue to be filed during this historic time of unemployment. Millions of people are idle in quarantine as the wait continues.