Applying for unemployment insurance after being laid off

Newly unemployed workers are entering a tough job market this year with the worst layoffs since the pandemic began, according to a new report.

Unemployment can leave workers struggling to pay things like mortgages and children’s college tuition, but experts say there’s one important thing to do before you rethink your spending or talk to a lender: apply for unemployment benefits.

It can take several weeks for your benefits to arrive, and minimizing that wait time can improve your financial situation.

“Workers should apply for unemployment benefits immediately after being laid off to cover essential expenses and have savings available for true emergencies,” said Douglas Bonepers, a certified financial planner and president of Born Fied Wealth in New York. Boneparth is also a member of the CNBC Financial Advisor Council.

U.S. employers have cut 1.17 million jobs through November this year due to corporate restructuring, artificial intelligence and tariffs, consulting firm Challenger, Gray & Christmas reported Thursday. This number is the highest level since 2020, during the height of the coronavirus pandemic.

Payroll processor ADP also revealed this week that private companies cut 32,000 jobs as the labor market slowdown intensified in November.

Here’s what workers need to know about unemployment benefits.

Michelle Evermore, a senior fellow at the National Academy of Social Insurance, said you need to gather the following information before applying for unemployment benefits:

Salary details for the past 18 months. The name and address of your previous employer during that period. social security number. State-issued identification, such as a driver’s license. Any documentation from your last employer, including information regarding your resignation.

Experts say if you live in one state and work in another, you’ll apply for aid in the state where you worked.

You can find contact information for your state’s unemployment assistance agency on a website sponsored by the DOL.

State officials are required to pay benefits within three weeks of an application, but Evermore said delays have become more common since the pandemic.

“The situation will probably get worse as layoffs increase,” she added.

Maximum unemployment benefits vary by state. For example, the maximum weekly benefit in California is $450. Florida’s cap is $275, Evermore said. New York state’s maximum weekly benefit amount recently increased to $869.

In most states, claimants can receive unemployment benefits for 26 weeks, Evermore said, but in some states it’s shorter. In Florida, for example, benefits last only 12 weeks.

Unemployment benefits are taxed at the federal level and in many states as well. Once you start receiving payments, states typically give you the option to withhold taxes, Evermore said.

She says it’s a good idea to take that option to avoid potentially paying a hefty tax bill later.