	Introduction

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). 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 allows states the option of temporarily ignoring the benefit year requirement. Temporary Grandfathering of Expansion of EB Eligibility, at States' Option

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. Extension of Railroad Unemployment Insurance Benefits

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. Subsequent legislation authorized these extended unemployment benefits for additional months. The exclusion is applicable for taxable years beginning after December 31, 2008. What Do States Need to Do to Receive the Federal Monies in ARRA for Unemployment Insurance? Unemployment Modernization Provisions in ARRA

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. All incentive payments must be made before October 1, 2011. If certified, these states will not need to enact additional state legislation. ARRA provides for federal financing of several elements of the stimulus package. As a result of ARRA, EUC08 benefits through expiration of the EUC08 program will be financed from general revenues of the Treasury. $500 million transfer to states for administrative costs . ARRA Waives Interest Payments and Interest Accrual on Federal Loans to State Unemployment Accounts During 2009 and 2010

ARRA temporarily waives interest payments and the accrual of interest on federal advances to state unemployment funds. The interest payments that come due beginning February 17, 2009, the date of enactment for the stimulus package, until December 31, 2010, are deemed to have been made by the state (and are not capitalized in to the principal of the loan).
The American Recovery and Reinvestment Act of 2009 (P.L. 111-5, also known as ARRA or the 2009 stimulus package) contained several provisions affecting unemployment benefits, described below.
ARRA temporarily increased unemployment benefits by $25 per week for all recipients of regular unemployment compensation (UC), extended benefits (EB), emergency unemployment compensation (EUC08), Trade Adjustment Assistance (TAA) programs, and Disaster Unemployment Assistance (DUA). The act extended the temporary EUC08 program through December 26, 2009 (with grandfathering), to be financed by federal general revenues. The EUC08 program's expiration date has since been further extended. It provided for temporary 100% federal financing of the EB program, to be financed by the federal government through the Unemployment Trust Fund. ARRA allowed states the option of changing temporarily the eligibility requirements for the EB program to expand the number of persons eligible for EB benefits, to end before June 1, 2010. It provided for an additional 13 weeks to the maximum amount of time railroad workers may receive extended unemployment benefits. The legislation suspended income taxation on the first $2,400 of unemployment benefits received in 2009, for taxable years beginning after December 31, 2008. It provided relief to states from the payment and accrual of interest on federal loans to states for the payment of unemployment benefits, from enactment of the stimulus package on February 17, 2009, through December 31, 2010. ARRA provided for a special transfer of up to $7 billion in federal monies to state unemployment programs as "incentive payments" for changing certain state UC laws. All incentive payments must be made before October 1, 2011. States do not need to repay these sums to the federal government. Any changes that states make to state unemployment programs as a result of ARRA's modernization provisions would be permanent. Finally, the act transferred a total of $500 million to the states for administering their unemployment programs, within 30 days of enactment of the 2009 stimulus package. States do not need to repay these sums to the federal government.
This report addresses some of the more common questions about unemployment insurance in the 2009 stimulus package as Congress approved it in February 2009. The report does not provide operational details of unemployment insurance programs such as UC, EB, or EUC08, nor does it address the TAA or DUA programs.
Since ARRA's passage, certain elements of the package have been authorized for additional months and the EUC08 program has been expanded to include additional benefit tiers. For more information, see CRS Report RL33362, Unemployment Insurance: Programs and Benefits, by [author name scrubbed] and [author name scrubbed]. This report will not be updated.