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Many states are ending $300 weekly unemployment benefit early. The child tax credit could step in for some.

by
Bob Mason
on
6/7/2021
Many states are ending $300 weekly unemployment benefit early. The child tax credit could step in for some.

As the United States slowly pulls out of the COVID-19 crisis, some Republican governors have taken steps to discontinue one of the benefits meant to offset the pandemic's impact. Though the American Rescue Plan Act (ARPA) established a $300 weekly unemployment benefit that was not set to expire until September 6th, approximately two dozen states are putting a stop to the program in the beginning of the summer.

Don't Look for A Changing of Minds

Over the course of the crisis, partisan push and pull has resulted in plenty of threats and resolutions, but there is little chance that will happen this time. Though there is strong support for the extra $300 payment from the White House, there is apparently little that they will be able to do to turn around the governors' cancellation of the benefit.

Child Tax Credit Will Make Up for the Loss, At Least for Most Parents

Though this will not be a help for those who don't have young children, another aspect of the rescue plan will still be in place for those who do. The 2021 child tax credit that was a major element of the ARPA will be administered through the IRS, providing up to $250 per month for each child over the age of six and $300 per month for younger children. This will be particularly good news for parents who will be losing the supplemental unemployment benefit.

The Reason Behind the Recall

The additional $300 unemployment benefit was profoundly popular, and though there are plenty of jobs available right now, economists are quick to point out that many require skills that not all unemployed people have. Yet some GOP governors insist that paying $300 per week is acting as a disincentive for people to go out and find work. In a note to clients, banking giant JPMorgan's analysts stated the obvious, noting that even though data regarding worker earnings, worker shortages and unemployment rates aren't supportive of the Republican theory, politics is playing an outsized role in the decision.

Will Everybody Lose Their Benefits, No Matter What Type of Work They Do?

In our economy, there are many different types of workers who had qualified for the supplemental $300, including those who were part-time workers, gig or freelance workers, and the long-term unemployed. Unfortunately, if you are one of the two million-plus individuals living in one of the states whose governors are opting out of the Pandemic Unemployment Assistance or Pandemic Emergency Unemployment Compensation, there's a good chance that your category of unemployment isn't going to save you. The best way to be sure is to check your state's website though, as not all states are handling the pullback in the same way.

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Bob Mason

Bob Mason

Founder

Bob Mason is a skilled financial professional who is fully equipped to assist any of your accounting needs. Founding his firm in Santa Cruz, Bob understands the importance of small businesses and how they form the backbone of the area. Coast Financial Services, Inc. has been dedicated to the growth and profitability of businesses in Santa Cruz for 17 years. To learn more about Bob Mason and the rest of his team, visit their website.

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