The shock of losing your job can be overwhelming. However, the decisions you make during this time are crucial to making a successful transition to a new position. In Part 1 of this series, I provided information about checking into eligibility for unemployment insurance. Clickhere to read.
1. File your claim for unemployment benefits as soon as possible. If you wait, you may lose out on benefits. You must meet eligibility requirements, but you can determine these from your state’s unemployment office. You may even be eligible for benefits (even partial benefits) if you work part-time. You may also be eligible to collect unemployment benefits while you are collecting severance or other benefits from your current position. Getting paid for unused vacation time you accrued normally does not affect your eligibility. However, you will not be eligible for benefits if you continue to receive your full salary and benefits your employer paid while you were employed.
2. Unemployment benefits count as taxable income on your federal tax return. Unemployment compensation may or may not be taxable in your state. Check with the Department of Labor in your state for information and your tax advisor for advice. Make sure you set aside part of the money for taxes if taxes are not withheld from your payment. (In many states, you must request that taxes be withheld from your payment.) You may have to make quarterly estimated tax payments if you do not have taxes withheld from your unemployment benefit payments.
3. Getting fired may also open a new door to self-employment. But if unemployment benefits require jobseekers to continue looking for traditional work full-time, someone pursuing self-employment may lose their unemployment benefits, because they are not “actively seeking work.” In 2012, the Middle Class Tax Relief and Job Act authorized $35 million in funds to encourage states to enhance and promote Self-Employment Assistance (SEA) programs. SEA entitles unemployed individuals to claim jobless benefits while simultaneously gaining access to small business development assistance. Check with your state’s Department of Labor to see if they offer a SEA program.
4. There are retraining and job support services available through the federal government. The national system of local One-Stop Career Centers (established by the Workforce Investment Act of 1998) offers job search assistance, career counseling, job search workshops, labor market information, job training, and vocational rehabilitation. You may access many of these services for free. Some programs provide funds for transitional training to individuals unable to obtain or retain employment. These programs are administered by each state, so check with your state’s Department of Labor office for eligibility and access.
In some states, you may be able to receive one-on-one job counseling services (“intensive services”), including career testing, development of an individual employment plan, and group or individual counseling and career planning. These services can be accessed in addition to your work with a professional résumé writer. You may also be eligible to receive occupational skills training, private sector training programs, entrepreneurial training, adult education programs, and customized training, although some programs are only available to low-income individuals.
Take advantage of the programs available to you. Many of these are paid for through state and federal funds. This isn’t charity. These are programs paid by tax dollars, and the goal is to get you back working again.
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