The latest coronavirus stimulus deal is a welcome relief for Americans. However, it contains several restrictive measures that will affect millions of Pandemic Unemployment Assistance (PUA) recipients, which includes independent contractors, gig workers, and the self-employed.
Former President Donald Trump signed the $900 billion deal into law on December 27, allowing PUA recipients to continue qualifying for federal assistance. While it extended the deadline for 11 more weeks, it also updated tax filing regulations that will impact current and new beneficiaries.
Namely, the law now requires that recipients provide proof of income to their state unemployment office or risk losing eligibility and reimbursing any benefits received after December 27.
According to Michele Evermore, an unemployment policy analyst at the National Employment Law Project, the recent PUA filing restrictions are “a real pain,” she told The Penny Hoarder. “Not just for recipients, but for state agencies to collect. Every burden we add to state agencies slows benefit processing for everyone.”
The change is designed to prevent fraudulent activity. Data from the Department of Labor (DOL) shows that over 7.4 million self-employed or gig workers depend on the PUA and will be impacted by the update.
New PUA Rules And Cutoff Dates
The recent stimulus bill offers two different deadlines for existing and new PUA recipients. Current recipients and those who apply before January 31 must file proof of income before March 27 to keep their benefits. Applicants who file for PUA benefits after January 31 will have 21 days to provide proof of income.
The DOL mandates that each state informs PUA beneficiaries about state-specific changes. Not every state will have the same cutoff date or document requirements, so recipients should check their individual state’s guidelines. In most states, PUA recipients will most likely need to submit:
- 1099s, W-2s, and other tax documents
- Ledgers, pay stubs, and earnings reports from gig apps
- Recent direct deposit records
For self-employed workers, states might require:
- Federal or state income tax records
- Business license
- 1040 tax form, including a Schedule C, F, SE, or K
- Other proof of self-employment (e.g., utility statements, rent contracts, or checks)
If you are eligible for the PUA program because a job you were hired for fell through because of the pandemic, you might need to provide a letter or statement detailing the offer, including the employer’s information and other information to prove your claim.
In addition, PUA recipients will be required to self-certify that they fulfill at least one of these requirements each week:
- You contracted COVID-19 or developed symptoms and are pursuing a diagnosis
- Someone in your household is diagnosed with COVID-19
- You care for somebody diagnosed with COVID-19
- You care for a child or other person in your home who is unable to attend school or work due to pandemic-related closures
- You are required by a doctor or health professional to self-isolate
- You are unemployed and were supposed to begin work but are unable to attend due to the pandemic
- You are the primary source of household income because the head of household died from COVID-19
- You were forced to quit your work due to the pandemic
- Your workplace shut down due to the pandemic
When you self-certify, you swear the grounds for your eligibility are valid on the threat of perjury. Before the new law, applicants only needed to self-certify once — when they submitted their application for the first time.
According to Evermore, because existing PUA beneficiaries were not required to provide all of these documents the first time they qualified, they may not have the necessary documentation anymore.
“People who were told they don’t need documentation may have lost it, and this will create panic resulting in more stress on people who have already had an unimaginably bad year,” she explained.
But, Evermore noted a silver lining: states have the power to waive a few of these criteria if recipients can show they have “good cause” for being unable to file the required paperwork. Of course, “good cause” will also vary from state to state, so it’s best to double-check.
“People who got approved for benefits in the past won’t necessarily get cut off from benefits simply because they are unable to produce the requested documentation,” Evermore advised. “Just follow all of the agency’s instructions carefully.”
- Hardy, Adam. “Receiving Jobless Aid? Don’t Miss This Deadline or You Might Owe Money.” The Penny Hoarder, The Penny Hoarder, 15 Jan. 2021, www.thepennyhoarder.com/make-money/side-gigs/new-pua-rules/?aff_sub2=homepage.