After you lose your job, you’re going to want to sign up for your unemployment compensation right away. The first thing you’re going to do is check out your state’s website about unemployment compensation. Make sure that you go to a state government website—it will have a .gov in the address. You’ve got to be careful not to try to apply through one of the .com websites. Those aren’t government sponsored sites—they’re just compiling email lists and you’ll be deluged with spam that you agreed to receive by using that site. (Yep, you lost your job, you’re broke, and now they want to sell you more stuff.) In Missouri you’ll go to: www.moclaim.mo.gov.
Your unemployment compensation is taxable—it’s all taxable. A lot of people don’t realize that and don’t have withholding taken out and then they really get dinged at tax time. Let’s say that your spouse is still working and your combined income for the year puts you in the 25% tax bracket. If you’ve received $10,000 in unemployment benefits, then the tax on that would be $,2500. If you’re not withholding for that, it can be an ugly surprise in April.
On the other end of the income spectrum, let’s say that your unemployment is the only income you’re receiving—the standard deduction and exemption for a single person is $9,350. You’re probably better off not withholding and using the full amount of your unemployment check to put food on the table.
For persons with children—unemployment compensation will not qualify you for an Earned Income Credit. You must have wages or self employment income in order to qualify for the Earned Income Credit, unemployment doesn’t count.
Different states have different rules regarding their unemployment benefits. I recommend signing up for benefits as soon as possible to avoid missing any deadlines and possibly losing out on potential benefits. In most cases, you’re going to need the following information before you sign up:
- Your name , including any prior names if you’ve changed it
- Social security number
- Telephone number
- Name of county where you live
- Employment history: Employers names, mailing addresses (including zip code), last day of employment and why you’re not working any more (quit, fired, laid off, leave of absence, etc.)
- Bank routing and account number if you want direct deposit of your benefits
- Information about any holiday pay, sick pay, or severance pay that you received or are still entitled to
- Pension information, if you began receiving one
- If you’ve served in the military within the past 18 months you’ll need DD form 214– record of service and discharge
- If you’re a Federal employee you’ll need your SF8
- You’ll need your SF 50– where your duty station was– if you have one of those
A word about collecting benefits: Unemployment compensation is part of an insurance program. Your employer pays into the system for you to cover situations like this. Unemployment insurance is paid by your employer based upon a percentage of your income. Your employer pays state and federal unemployment insurance. You wouldn’t think twice about using your health insurance if you were sick, it should be the same way with your unemployment insurance. It’s there for you to use when you need it. Don’t let your pride get in the way of receiving something that is rightfully yours.