The American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ), the 2009 stimulus package, contained several provisions affecting unemployment benefits. This report addresses some of the more common questions about unemployment insurance in the 2009 stimulus package. This report does not provide operational details of unemployment insurance programs such as regular unemployment compensation (UC), extended benefits (EB), emergency unemployment compensation (EUC08), Trade Adjustment Assistance (TAA) programs, and Disaster Unemployment Assistance (DUA). ARRA created a temporary, federally funded, $25 weekly additional benefit for individuals currently receiving regular UC, EB, EUC08, TAA, and DUA benefits. Unemployed railroad workers are not eligible to receive the $25 per week supplemental benefit. ARRA made the supplemental weekly benefit available to individuals on a temporary basis, beginning the week after the state entered into an agreement with the Labor Secretary. All states signed such agreements. The additional benefit is payable either at the same time and in the same manner as other unemployment compensation payable for the week involved, or payable separately but on the same weekly basis as other unemployment compensation. States are not allowed to alter computation of UC under state law in such a manner that the weekly benefit amount would be less than the benefit amount that would have been payable under state law as of December 31, 2008 (i.e., prior to enactment of the supplemental benefit). The $25 per week supplemental benefit will be grandfathered for individuals who have not exhausted the right to all unemployment benefits as of the expiration date for this temporary program. An individual who is grandfathered for payment of the supplemental weekly benefit for one form of unemployment benefit (such as regular UC) would receive the $25 supplemental weekly benefit for subsequent unemployment benefits after the program expires (such as EB or EUC08) until the individual has exhausted all entitlement to unemployment benefits based on the original claim or until the last date that current law allows the grandfathered payment. As a practical matter, state unemployment systems sometimes needed three weeks, or more, after signing an agreement with the Department of Labor (DOL) before they were administratively able to start providing the supplemental weekly benefit. However, benefits began to accrue to the unemployed in the week following the signature of the state-DOL agreement. These accrued benefits were paid retroactively. No supplemental weekly benefits were paid retroactively for weeks before the state signed an agreement with DOL. The EUC08 program is a temporary, 100% federally financed program that provides additional weeks of unemployment benefits at the state level. At the time ARRA was passed, the first tier of EUC08 provided up to 20 additional weeks of unemployment compensation to all qualified workers who had exhausted regular unemployment compensation. The second tier of EUC08 provided up to an additional 13 weeks of benefits in states with high unemployment. DOL tracks unemployment rates in the states, and a state is said to trigger "on" to EUC upper tier benefits if unemployment conditions in the state reach certain thresholds. ARRA extended the availability of EUC08 benefits through December 26, 2009. After the expiration of the temporary EUC08 program, there will be no new entrants into any benefit tier. Those beneficiaries receiving any tier of EUC08 benefits at the time the program expires will be "grandfathered" and will receive their remaining weeks of benefits in that tier only. Since the passage of ARRA, the EUC08 program has been extended beyond December 26, 2009, and EUC08 benefits have been expanded to include additional benefit tiers. For more information, see CRS Report RS22915, Temporary Extension of Unemployment Benefits: Emergency Unemployment Compensation (EUC08) , by [author name scrubbed] and [author name scrubbed]. ARRA provides a temporary, supplemental $25 weekly benefit for recipients of unemployment compensation, including EUC08 recipients. The EB program is a permanent federal-state program that may provide additional weeks of unemployment benefits at the state level. The EB program provides up to a maximum of 13 weeks during periods of high unemployment and up to a maximum of 20 weeks in certain states with extremely high unemployment. DOL tracks unemployment rates in the state, and a state is said to trigger "on" to the EB program if unemployment conditions in the state meet specified conditions. ARRA provides a supplemental $25 weekly benefit for recipients of unemployment compensation, including EB recipients. ARRA temporarily expands, at the option of the states, eligibility for the EB program. As the EB program has operated in the past, a beneficiary had to be within his/her original "benefit year" when the EB program triggered "on" in the state in order to receive EB benefits. The benefit year is a one-year period during which a worker may receive benefits based on a previous period of unemployment. Thus, on the condition that the state triggered "on" during an individual's benefit year, he or she could receive EB benefits during the benefit year, or even after the benefit year expired, that is, at the time he or she exhausted regular unemployment compensation or EUC08 benefits even if this occurred after the expiration of the benefit year. However, if the state's most recent EB period triggered "on" after the individual's benefit year ended , the beneficiary would not receive EB, under law prior to ARRA. As a result, in states that have recently triggered "on" to EB because of rising unemployment rates, many individuals may be ineligible for EB benefits if their benefit years expired before the state triggered "on" to the EB program. ARRA allows states the option of temporarily ignoring the benefit year requirement. Instead, states can choose to use exhaustion of EUC08 benefits as an eligibility requirement, for weeks of EB benefit payments that fall between ARRA's enactment and expiration of 100% federal funding of the EB program, and as long as the state was triggered "on" for EB during the period when the individual was receiving EUC08. This has the effect of allowing more individuals to be eligible for the EB program. One issue for states considering adopting the temporary expansion in eligibility is that while ARRA provides for temporary 100% federal financing of EB, this federal financing does not apply to unemployed former state and local government employees. On the other hand, the dollar amounts gained by states through 100% federal financing of the EB program are likely to be substantial. ARRA also allows states to opt to grandfather this change in EB eligibility for those who enter the EB program on or before the expiration of 100% federal financing of the EB program. Grandfathered EB benefits would continue to be 100% federally financed until they are exhausted (except for state and local workers). ARRA adds an additional 13 weeks to the maximum amount of time railroad workers may receive extended unemployment benefits, allowing for up to 26 weeks of extended benefits in addition to the 26 weeks of normal benefits provided under current law. The increase in extended benefits applies to all qualifying railroad employees, regardless of their years of service (i.e., it would apply to those with fewer than 10 years of service, who do not qualify for extended benefits under current law). The provision applied to employees who received normal unemployment benefits during the benefit year beginning July 1, 2008, and ending June 30, 2009. Subsequent legislation authorized these extended unemployment benefits for additional months. For more information, see CRS Report RS22350, Railroad Retirement Board: Retirement, Survivor, Disability, Unemployment, and Sickness Benefits , by Scott Szymendera. All individuals who received regular UC, EB, EUC08, TAA, DUA, or Railroad Unemployment Insurance (RRUI) in 2009 may exclude from gross income up to $2,400 in benefits received in 2009. To qualify, an individual must have received unemployment benefits (it is not sufficient to be unemployed). The exclusion is applicable for taxable years beginning after December 31, 2008. The Joint Committee on Taxation estimated this would reduce federal receipts by approximately $4.7 billion. All states signed the agreement with DOL that is required to receive the FAC $25 supplemental weekly benefit. States must submit an application to receive the states' shares of the $7 billion for modernization of state unemployment programs. States must sign an agreement with DOL to receive the $25 per week supplemental unemployment benefit. All states entered into such agreements with DOL. These agreements apply to weeks of unemployment "beginning after the date on which such agreement is entered into." As a practical matter, state unemployment administrations sometimes needed three or more weeks from the time of enactment until they were able to begin the first supplemental payments. The 100% federal financing of the EB program in 2009 does not require states to enter into an agreement with the Labor Secretary. ARRA provides for a special transfer of up to a total of $7 billion from the Federal Unemployment Account (FUA) within the UTF to the State accounts within the UTF as "incentive payments" for changing certain state UC laws. These changes must be permanent and not subject to discontinuation under any circumstances other than repeal by the legislature. The maximum incentive payment allowable for a state would be calculated using the methods used in Reed Act distributions. That is, funds would be distributed to the state UTF accounts based on the state's share of estimated federal unemployment taxes (excluding reduced credit payments) made by the state's employers as estimated at the end of FY2008. DOL has issued an advisory providing guidelines for applications, which it has posted at http://wdr.doleta.gov/directives/corr_doc.cfm?docn=2715 . After a state submits a completed application, DOL may take up to 30 days to make a determination as to whether a state qualifies (is certified) to receive the unemployment modernization incentive payment. Applications are due to DOL by August 22, 2011. All incentive payments must be made before October 1, 2011.