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Newly unemployed get stimulus help

People with high incomes won't receive the benefit. The subsidy starts to phase out at annual income levels of $125,000 for individuals and $250,000 for couples. It disappears for individuals who make more than $145,000 a year, and couples whose annual income is higher than $290,000.

Your old company should contact you with information if you are eligible for the benefit.

"If you don't hear from your former employer soon, and you think you qualify for the subsidy, call them and ask for details," Oliver says.

COBRA coverage ends when you're hired at a new job and enroll in that company's health insurance program or are otherwise eligible for other insurance or Medicare.

Extended unemployment compensation

The stimulus legislation also provides for an increase in unemployment benefits. People who collect this compensation will get an extra $25 in their weekly checks.

"It may seem like a small amount, but the extra money can go a long way to help a person stay afloat financially," Oliver says.

The stimulus package offers two boosts to unemployment coverage:

Unemployment benefit help
  • Compensation increased by $25 each week.
  • Benefits extension extended through the end of 2009.

There's also a tax benefit. Many people don't realize employment benefits are taxable, says Mark Luscombe, principal analyst for the tax and account group at CCH, a Wolters Kluwer business in Riverwoods, Ill.

"With this legislation, people who collect unemployment checks won't have to pay taxes on the first $2,400 they earn," he says. "This is for the year 2009 only."

The stimulus package also extends the amount of time a person can collect unemployment to up to 33 extra weeks. This extension was passed last year and was supposed to be phased out in March. However, the recently signed bill now extends benefits through the end of 2009.

How to take advantage: The best way to get this benefit is to sign up for unemployment compensation. Contact your state unemployment insurance agency to determine if you qualify.

Creating new jobs

The stimulus bill has several provisions meant to indirectly help unemployed workers by offering incentives to small businesses to create jobs.

For example, there's a provision that offers a tax incentive to companies that hire recently discharged veterans, as well as "disconnected youth" -- defined as people between the ages of 16 and 25 who haven't been attending school or aren't regularly employed.

The goal for incentives like these is to start pumping money into small businesses, which employ about half of the private sector work force, Smith says

"The hope is that if you can keep small businesses healthy, employment will follow naturally," Smith says.

How to take advantage: There's not much you can do to take advantage of small business tax credits. Hopefully, the credits will do the work themselves by creating new jobs. Your best option is to continue to seek employment.

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