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PART ONE: UNEMPLOYMENT COMPENSATION BASICS

WHAT IS UNEMPLOYMENT INSURANCE? Unemployment insurance is a weekly benefit paid to workers who are either unemployed or working reduced hours, through no fault of their own. Not everyone who applies for unemployment benefits will qualify. Claimants (people claiming unemployment insurance benefits) have to meet certain condition to be considered eligible; and must stay eligible, to receive benefits. If you meet all conditions for eligibility, your claim is approved.

HOW IS THE UI PROGRAM FUNDED? Unemployment benefits are funded by employer taxes. Qualifying employers pay taxes on the first $8000.00 of each employee’s gross earnings during a tax year-these are called insured wages. Quarterly state tax payments are deposited into the Unemployment Compensation Trust Fund and used only to provide unemployment compensation benefits to eligible claimants. Not all employers are required to pay the unemployment compensation tax, and employees don't pay any unemployment compensation taxes on wages they earn.

YOUR SOCIAL SECURITY NUMBER We can only process your claim if you provide your Social Security Number. We use your Social Security Number to verify your identity, locate your employer(s) and your wages, determine other income, determine eligibility, keep records of your benefit payments, and gather statistics. The authority to require your social security number is found under the Internal Revenue Code of 1954, and the Code of Alabama, 1975.

INCOME TAX WITHHOLDING Unemployment benefits are considered taxable income. Each year, all your unemployment benefit payments are reported to the Internal Revenue Service (IRS). You can request to have federal income taxes withheld from your unemployment benefit payments. If you choose to have federal tax withheld, your weekly benefits will be reduced by 10 percent (10%), which is the current federal income tax rate. You have the option to change your withholding status only once during your claim year. We will mail a Statement of Benefits, Form 1099-G, to your last address of record no later than January 31st of each year. You can also find a copy of your 1099-G on our website at www.workforce.alabama.gov.

BENEFIT PAYMENT OPTIONS You have two options for receiving unemployment benefit payments: 1) Direct Deposit: To set up direct deposit and have your benefit payments automatically deposited into your checking or savings account, you’ll need to provide your bank routing number and account number when you file your claim. You can find the nine-digit bank routing number on the bottom left of your check. If your claim is eligible, funds are deposited into your checking or savings account within two business days. 2) The AL Vantage Prepaid Benefits Card: The AL Vantage Card is a prepaid debit card serviced by Comerica Bank- you can use it anywhere you’d use another debit card. There are fees associated with certain activities, and the service card provider is subject to change. Your AL Vantage Card will not be mailed until your claim has been approved, which could delay receipt of your first payment by up to 10 days. Additional information about the AL Vantage Card is available online at www.goprogram.com.