en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en
Unfortunately, you just joined their ranks and find yourself on the wrong end of a pink slip.  You’ve never been unemployed and have no idea what to do.
How do you file for unemployment benefits?  Where do you turn?
You’re frustrated, lost, and perhaps a bit ashamed.
Don’t worry.  Every employer that has ever employed you paid into the unemployment insurance fund on your behalf.
It is now your turn to get to use that fund while you get back on your feet to find your next job.
How to File for Unemployment Benefits – 3 Steps
Here are a basic set of steps to guide you through the process.
Unemployment Benefit Claims Process Depends on State
There is no cut and dry, cookie cutter answer as to how to file an unemployment claim in your state.  That’s because every state has their own unemployment fund and process to file claims against that fund.
Generally speaking, there are some pieces of information you need to have available:
Social Security Number (preferably on a Social Security card)
State issued ID like a driver’s license
Contact information for previous employers
Be prepared to provide this for up to 24 months in the past
Your Employer’s Federal ID number (it’s on your pay stub or W2 statement)
When you started and finished work at a given employer
What you were paid (salary or hourly) for a given employer
Don’t wait, get moving on filing for unemployment benefits once you lose your job.
As with any government process simply having your stuff together will make things go a lot more smoothly.
You have to imagine the person on the other side of the counter that you are talking to is used to dealing with people that are missing vasts amounts of information.  Have your information together and knock everything out in one trip.
Likewise I’m sure they are used to being yelled at all day long by people who are frustrated their claims have been denied or delayed.
Don’t Wait to File
Even if you think you will be unemployed for a short period of time there is no reason to wait to file an unemployment insurance claim.
You paid into the unemployment fund when you were working, why not use it?
Many states require you to serve a full one week waiting period before you can begin to receive unemployment payments.  If you wait until money is really tight in your household to file, you still end up waiting.  Likewise there may be a problem with your application: your employer may dispute your claim, saying you weren’t laid off but fired for cause.  This can cause a lot of headaches in filing for unemployment and even result in you not being able to file unemployment at all.
Nonetheless, if you apply the week or day you are laid off you guarantee yourself the shortest period of time between losing your job and getting unemployment income.
Consider Unemployment Income Tax
Here’s an unpleasant shocker: not only are you laid off and not making the income you were expecting this month, but the unemployment benefits you receive count as taxable income.
That’s right.  The Internal Revenue Service wants a cut of your unemployment income.
You have two options in dealing with the taxation of your unemployment income:
No Tax Withheld, Owe at Tax Time
You just lost your job.  You’re in a financial shock.
The last thing you need is to take the incredibly small unemployment benefit check and cut it down even further with tax withholding.  You can elect to have no tax taken out.
The only problem is that when you go to file your taxes next year you will have a larger tax bill.  This is an unfortunate choice, but if you weren’t expecting the layoff you may not be able to afford to lose any money to the government up front.
Withhold Tax Now, Owe Less Tax Later
On the other hand if you have an emergency fund it can make sense to have tax withheld now to avoid big tax problems next year.  The difference might seem small, but to avoid any problems let the government have their cut now and be done with it.
Being unemployed is something few people want.
Most people would rather earn a living than live off a small check from the government.
Use the steps above to get the process rolling as quickly as possible.  Make sure you have your documentation in order, and don’t wait to file until you really need the benefit.
Every penny counts when you are unemployed and you paid into the fund when you were working.  And make sure you tell your state how you want taxes held so you can avoid tax problems next April.
Have you ever filed for unemployment benefits? How was the process?
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, ING Direct, and many others.
Kevin @ Growing Family Benefits says
December 12, 2012 at 12:44 pm
The American Recovery and Reinvestment Act of 2009 provided incentives to states to “modernize” their employment compensation systems.
Most people are familiar with the extension of the benefit duration.
What is less publicized is that twenty two states implemented an expanded definition of who qualifies – workers leaving due to a “compelling family reason”. This mostly applies to workers needing to care for a sick family member, but sometimes also includes a workers own disability. Each state is different.
Chris @ Stumble Forward says
December 14, 2012 at 12:39 pm
I would have to agree unemployment is a good thing, especially when you’re at risk of possibly getting laid off. However, what I don’t like about unemployment is how people can get away with so much.
Now I don’t know how unemployment works in other states but in Ohio if you go to the unemployment office to file a claim even if you’ve been fired from your job you can still collect. This recently happened with my business, an employee of mine got caught with drug paraphernalia and was fired because we do not tolerate it.
We had witnesses and even documented everything and they still gave him his unemployment benefits. Don’t get me wrong I think unemployment is a great program but I wish the states would do more to stop those who are getting benefits when they shouldn’t.
A Little About Me
I'm Glen Craig - I used to live paycheck-to-paycheck, drowning in credit card debt. I turned that all around and now I build wealth rather than debt.
My goal is to make personal finance easy for you.
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