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Last updated April 17th, 2020
The monumental Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed into law on March 27, 2020, authorized a massive expansion of unemployment insurance benefits for workers negatively impacted by COVID-19. It does so in a few key ways: it supercharged existing benefits, expanded eligibility, and extended benefits to many business owners.
People Can Receive More Benefits For Longer
First, workers eligible for unemployment may now receive an additional $600 per week while receiving unemployment from April 5, 2020 through July 31, 2020. This is on top of the weekly benefit amount the worker would normally receive. Just like any other state-administered unemployment benefits, the additional income is taxable.
Second, the CARES Act extends how long a worker can receive payments. Now, if a worker is unemployed or partially employed due to COVID-19, they can receive an additional 13 weeks of unemployment. Previously, Illinois ended unemployment benefits after 26 weeks; under the CARES Act, that changes to 39 weeks. These extended benefits are available through December 31, 2020.
Of course, this all depends on the resiliency of our current system. Many applicants, unclear on how to access these boosted benefits, have expressed frustration at contradictory advice and a lackluster response from unemployment offices – unsurprising, given the drastic changes and rapid rollout. So as you apply, moderate your expectations, and keep trying, even if it takes awhile.
More People Can Receive Benefits Under CARES
The CARES Act also expands coverage to some classes previously unable to access unemployment benefits, such as independent contractors and self-employed individuals. According to the Act, to be eligible for “Pandemic Unemployment Assistance,” one must be unemployed, partially employed, or unable to work for reasons relating to COVID-19, such as:
- An individual has been diagnosed with COVID-19 or is experiencing COVID-19 symptoms and seeking diagnosis;
- A member of the individual’s household has been diagnosed with COVID-19;
- An individual is caring for a family or household member diagnosed with COVID-19;
- An individual is the primary caregiver of a child or household member who is unable to attend school or another facility that is closed due to COVID-19;
- An individual is unable to reach their place of employment due to an imposed quarantine or was advised by a medical provider to self-quarantine due to COVID-19;
- An individual was scheduled to commence new employment and does not have a job or cannot reach the job as a direct result of COVID-19;
- An individual became the breadwinner or major support for a household because the head of the household died from COVID-19;
- An individual has to quit a job as a direct result of COVID-19; or
- An individual’s place of employment closed as a direct result of COVID-19.
This is especially important for gig workers, who traditionally have been excluded from unemployment benefits. These workers will be able to seek benefits under the Act. However, according to the IDES website, this program is still being formed as we’re writing this post. Until it is, self-employed individuals and independent contractors still cannot file for unemployment.
From our research, these expanded benefits for self-employed individuals and independent contractors include full benefits, just as a traditional W2 employee would receive. However, we have also heard of 1099 workers applying and receiving a response from the IDES stating that their estimated benefits are $0. We hope this is a glitch that will be resolved when the program is fully implemented. We will report back once we receive clarification.
UPDATE (April 17th, 2020)
On April 15, 2020, the IDES posted an update on their website regarding 1099 workers and self-employed individuals applying for unemployment. The IDES is now encouraging ALL individuals who are unemployed or underemployed to file a claim for benefits, even if they were told they were not covered or did not qualify for benefits.
In order to establish eligibility under the expanded benefit program, “each individual will have to demonstrate that he/she is not eligible under the regular program. Applying for and being denied benefits under the regular program can help establish eligibility under the new program.”
Per this language, it is still not clear whether self-employed individuals will immediately be able to access unemployment benefits. It seems to say that if you apply for and are denied unemployment benefits, that denial might expedite your application once the new program is up and running.
IDES is contracting with Deloitte to implement and maintain a web-based solution for these expanded benefits as quickly as possible, which should be ready by the week of May 11th. For now, it seems best to apply now for unemployment with IDES if you are not working, whatever the reason, with the expectation that you likely will not be able to access benefits until mid-May.
Read our full writeup for details and our assessment.
Are Business Owners Eligible for Unemployment?
Before COVID-19, business owners and self-employed individuals were unable to collect unemployment benefits. However, with the expanded benefits provided under the CARES Act, many self-employed people will now be eligible for these benefits, as just discussed. If your business is structured with an S-Corp tax status (both LLCs and C-Corps can elect to be taxed as an S-Corp) and you pay yourself a salary as an employee, you should be able to collect unemployment. Additionally, under the CARES Act, self-employed individuals can access unemployment benefits, allowing more business owners to file. When in doubt, try and see what the IDES says.
Speaking of the IDES, we recommend beginning the application process as soon as possible. As in many other states, the IDES is currently overloaded with requests for benefits, which is making the process harder and lengthier than it was pre-COVID-19. In order to help streamline the process, the IDES has implemented a new schedule for filing based on the claimant’s last name. Be patient; the state is stressed with unprecedented numbers of claims and it may be difficult to get ahold of someone at the IDES. Try filing online first, before calling. And know that you’re not the only one struggling – business owners and workers across the state are pressuring the government to fulfill the promises they made.
There are many questions that remain unanswered. More questions are bound to arise. The situation is changing constantly, day-to-day and even hour-to-hour, but we’re monitoring it closely to provide you with the best, most current information we can. Stay tuned to our blog, Facebook, and LinkedIn for more updates as they come.