The process for applying for unemployment insurance is pretty straightforward for workers who live and work in Pennsylvania. But what about workers who worked outside the state, lived outside the state but worked in Pennsylvania or who were employed by the Federal government or the military? The application process and eligibility requirements do change slightly in these circumstances so if fall within those parameters, you will be interested in this series of articles. This article will look at the application and approval process for Federal and Military employees in Pennsylvania, while our next article will focus on the procedure for interstate workers who live in a different state from where they worked.

The first step if you are an unemployed federal or military worker is to find out if you qualify for unemployment insurance in Pennsylvania. There are three main requirements you must meet. First, your last post or duty station was in Pennsylvania, second you are a Pennsylvania resident but your last post was outside of the United States, or third, your last employment after separating from your federal employer was in Pennsylvania.

What do you need to apply for UI?

Because the paperwork provided at termination by the federal government and military differs from that of regular employers in Pennsylvania, there are certain requirements you must satisfy that other employees do not. For instance, federal workers must wait longer to receive wage information than regular state workers, so you will need to mail your documentation to the UC Service Center of Pennsylvania. The documents you are required to provide include: your federal Standard Form 8, Notice to Federal Employee About Unemployment Compensation, Standard Form 50, Notification of Personnel Action and other documents that support your claim that you worked for a federal employer, such as your W-2 stubs, Withholding Tax Statement and pay stubs. Make sure you do not provide the original documents by post as these may get lost and you will have no further evidence of your employment. Copies will work just fine.

Act Quickly

Federal unemployed workers must, just as regular unemployed workers, file their claim as soon as possible. This means sending all supportive information to the UC Service Center as soon as possible. Notice you can only claim for unemployment weeks from the date you file your application. Previous weeks where you were unemployed and did not apply for benefits cannot be claimed for retroactively and they can affect your eligibility due to the way the Pennsylvania UI Agency calculates your base period: the income earning period that decides your unemployment insurance compensation.

With unemployment rates at all time record levels, unemployed workers are taking more than usual to find a new job. This can be extremely frustrating and stressful, especially as your state insurance benefits are close to running out. So, it is no surprise that one of the most frequent questions we get asked is, how many weeks of unemployment do I get in Pennsylvania? A popular variation on this question is, how many tiers of unemployment are ther in Pennsylvania?

If you are not sure what is meant by “ties”, you need a little background in a federal unemployment program called Emergency Unemployment Compensation.This unemployment compensation program is a safety net for Pennsylvania unemployed workers who exhaust their 26 weeks of state unemployment insurance and still are searching for suitable employment.

This program is divided into four tiers, each with a set number of unemployment benefit weeks. tier 1 has 20 weeks; tier 2 has 14 weeks, tier 3 has 13 weeks and tier 4 has six weeks. The number of tiers a state is eligible for depends on its seasonally adjusted unemployment rate. The seasonally adjusted unemployment rate of a state is simply its three-month average unemployment rate.

Therefore, it is more accurate to ask, how many tiers does Pennsylvania have NOW?

This is how the program works. All states qualify for tiers 1 and 2, regardless of their unemployment rate. If your state’s seasonally adjusted unemployment rate is above 6.5 percent, you qualify for tier 3, and if your state’s unemployment rate is above 8.5 percent, it qualifies for tier 4 also.

Pennsylvania’s seasonally adjusted unemployment rate has just fallen below 8.5 percent, so its tier 4 benefits system is phasing out. This means workers who exhaust their tier 3 benefit weeks will not be able to apply for tier 4 benefits. The Pennsylvania Unemployment Insurance Agency will send them information on how they can apply for other unemployment compensation programs, such as the Extended Benefits program.

However, if you qualified for tier 4 benefits before April, 2, 2011, you will continue to receive your tier 4 weeks until they run out.

The Extended Benefits program we mentioned above, does work as a de facto tier 5, which most states are eligible for. The Extended Benefits program provides 13 or 20 weeks of unemployment benefits to workers who exhaust their state UI benefits and EUC benefits.

Wait a second! You are telling me I have to pay taxes on my benefits? Afraid so. In the eyes of the IRS all benefits are considered taxable income. However, taxation on benefits is not the same as taxation on normal income, that is, income from a job. If you are unemployed or know someone that is, it is worth spending a few minutes checking how the taxation side of things works. It can save you a lot of trouble in the long run.

So What Taxes Do I Have To Pay?

You have to pay federal income tax on all the benefits you receive, whether they are state unemployment compensation benefits or federal EUC or EB benefits. They are all taxable. However, in Pennsylvania you don’t have to pay state or local taxes on your benefits. This means you will have to pay taxes equivalent to your federal tax bracket after deductions, but don’t have to worry about Pennsylvania taxes.

How Can I Pay For These Taxes?

You have four main options.

1) You can collect all your benefits and set aside money for when your taxes are due. If you choose this option, put aside at least 10 percent of your benefit amount. So if you receive $200 a week, put aside $20 a week, $80 a month aside for taxes.

2) Ask the PA Department of Labor to deduct an estimate of your taxes from your benefits. This is probably the easiest and safest method. You just have to sign a form authorizing the PA Department of Labor to deduct 10 percent from your gross benefits. Gross benefits means the entire sum you are entitled to before any deductions, such as deductions for earnings or child support, are taken away. If you wish the PA Department of Labor to withhold your federal taxes click here and update your tax withholding status or call 1.888.255.4728.

3) Put aside 10 percent of your gross benefits and make your own estimated tax payments every quarter. This is what self-employed workers do to keep on top of their taxes and you can do it whether you are self-employed, unemployed or employed. Simply fill in a 1040ES form to work out your quarterly tax. If you need any help working out your estimated taxes or want to know how to make these payments call 1.800.829.1040.

4) If your file joint returns with your spouse, get your spouse to increase the taxes they withhold from their wages. Once it is time to work out how much you owe, the amount your wife or husband overpaid will offset the taxes you owe. For this system to work you need to estimate how much you will owe in taxes and how much of your spouse’s income needs to be withheld to cover your tax burden.

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