The money you receive from the Michigan Unemployment Insurance Agency is, unfortunately for unemployed workers, taxable. This means that a percentage of your weekly benefits needs to go toward your end of year taxes to the Internal Revenue Service.

The Michigan Unemployment Insurance Agency makes calculating your tax liability easy by sending unemployment insurance claimants a 1099 form. This year the form will be ready by available online by February 1, 2012. The 1099 form will have the total benefits you received during the previous tax year. Simply add this to the income you declare in your tax return.

If you did not know you had to pay taxes on unemployment benefits or if you did not have the foresight to save for your tax bill, this may cause serious financial problems to you and your family. One way to avoid the surprise of a large end of year tax bill is to withhold a percentage of your benefits each week. You can either do this yourself by putting aside your estimated federal and state tax liability each week or ask the Michigan Unemployment Insurance Agency to withhold it for you. The Michigan UIA currently deducts 10 percent for federal taxes and 4.35 percent for state taxes. 

This is especially beneficial for claimants find it hard to save because the money is deducted automatically from your weekly benefit. You can request the unemployment insurance agency do this when you first claim for unemployment benefits.

If you opted-out of withholding taxes when you first claimed for benefits, you can still apply for this service by filling a UIA 1281 Income Tax Withholding form. Click here to view the Income Tax Withholding form.

The form is short and simple to fill in. It simply requires your Social Security Number, full name and a phone number to confirm your identity and have a way to contact you. Just tick the “Start withholding 10 percent Federal Income Tax and 4.35 percent for Michigan Income Tax” box, write the number of exemptions you plan to claim in your next state tax return, sign and date the form and you are good to go.

On the other hand, if the Michigan unemployment office is withholding taxes from your benefits and you want this to stop, you can use the same form to cancel this service. To do this just tick the “Stop withholding income taxes from my unemployment benefits” at the end of the document.

On December 19, 2011, Governor Rick Snyder passed legislation that substantially changed Michigan’s Unemployment Insurance program. This has caused many of our readers to ask questions about how these changes will affect them. This post will list some of the most frequently asked questions by our readers.

How will these changes to unemployment insurance policy be paid for?

The additional cost of these changes and the existing balance pending with the federal government for previous shared unemployment programs was repaid through the sale of bonds by the Michigan Finance Authority. On December 28, 2011, State Treasurer Andy Dillon announced the payment of $3.2 billion to the Unemployment Trust Fund. The repayment was financed by the sale of variable rate bonds.

After the recent changes, if I make a new unemployment benefits claim, how many weeks will I be eligible for?

Any new claims filed after January 15, 2012 will be entitled to a maximum of 20 weeks of state unemployment benefits. This, of course, does not include any federal benefits you may be entitled to once your state benefits expire.

How can I contact the unemployment insurance agency?

Although you may be used to contacting the Michigan unemployment office by visiting one of their offices or over the phone, the agency is now recommending insurance claimants open their an online account at the Michigan Unemployment Insurance agency and contact the agency online. However, those who prefer to speak face to face with an officer and don’t mind waiting in line or travelling can still visit one of Michigan’s Unemployment Insurance Agency’s many Problem Resolution Centers; or you may also call the agency’s Customer Service line at 1-866-500-0017.

I am having trouble certifying my unemployment benefits with MARVIN, what do you recommend?

This is a problem many of our readers complained about. The high volume of unemployment insurance claimants in Michigan has made it difficult for many workers to get through to MARVIN, Michigan’s Automated Response Voice Interactive Network. In this case we recommend you file your bi-weekly unemployment benefits claim using MARVIN’s online form. Unlike the telephone service, MARVIN’s online is practically always available. Click here to visit MARVIN’s online website. You will need to provide your username and password. If you do not have an online account with MARVIN open a new account by clicking on the “Register as a new user” link on the left of the ‘UIA Claim Portal Login’.

The recent changes in federal unemployment policies brought in by Congress’ new bill reduced federal extended benefits to Michigan workers by 20 weeks.

Add to this the reduction in state unemployment benefits from 26 to 20 weeks and soon Michigan unemployed workers will go from being able to collect a maximum of 99 weeks to a maximum of 56 weeks of state and federal benefits.

This has caused Democrats to ask Governor Snyder to push for an extension of state unemployment benefits and return them to 26 weeks.

Snyder says he will not push for reinstating the six weeks. According to a statement on the Oakland Press Friday, Snyder claims the reduction in state unemployment benefits is a result of the improvement in the economy and not only to changes to state law last year. He stated that his focus was on helping people acquire the skills to return to work; and although he acknowledges the difficult times many are going through he pointed out that there are restraints on how much Michigan State can do.

He also highlighted that the reason he approved the cut to state unemployment benefits last year was so long-term unemployed workers in Michigan could qualify for the full 99 weeks of unemployment state and federal benefits.

However, Democrats continue to pressure Snyder and the Republicans, who have a majority in the Legislature, to restore the six weeks in view of the recent federal unemployment benefits reduction.

According to Democrat Senator Gretchen Whitmer, the state Senate has a bill pending that could increase the amount of weeks unemployed workers in Michigan could qualify for. He urges the Governor and Republicans to approve this bill.

Representative Sander Levin, also a Democrat, said the reduction in state unemployment benefits last year was a serious mistake. A mistake the Democrats warned against and which now would hurt a lot of people. According to Levin, this includes the 47,000 people who have applied for benefits in the last three weeks.

The recent reduction in federal extended benefits was used as a bargaining chip by Democrats to get the extension of the 2 percent payroll tax cut for workers that expired in December.

So far the changes in the eligibility criteria for extended benefits has caused nearly 30,000 Michigan long-term unemployed workers to stop receiving their benefits.

The recent extension of federal benefits by Congress was welcomed by thousands of unemployed Michigan workers who rely on extended benefits as their main source of income. However, what many did not realize is that with the same bill Congress both extended and reduced the benefits Michigan workers are eligible for.

The bill allowed unemployed workers who exhaust their emergency unemployment compensation benefits to continue applying for federal extended benefits, but it reduced the amount of weeks they are eligible for.

The maximum number of weeks an unemployed worker can receive in Michigan dropped from 99 weeks to 77. However, the exact consequences these changes will have on unemployed workers are still unclear.

In an effort to clarify the effects these changes will have and to respond to the high volume of new claims, the Michigan Unemployment Insurance Agency is increasing its weekend opening times.

What is clear is that nearly 30,000 workers who are struggling with long-term unemployment will stop receiving unemployment benefits in Michigan due to these changes. Why?

The key is in how the eligibility for Extended Benefits is calculated on the state level. The main trigger for a State to qualify for Extended Benefits is that its jobless rate is higher than the corresponding period over the last three years. As Michigan’s unemployment rate has dropped in the last three years, it is considered a recovering state and no longer qualifies. In fact, Michigan would not qualify for Extended Benefits even if its unemployment benefits had remained the same for three years.

Some Democrats in Congress were advocating to extend the period used to determine eligibility from three years to four, just as it had previously changed the period from two to three years. However, senior Democrats reported this was the price that had to be paid to get Republicans to compromise to an extension to the program.

As bad as this sounds for long-term unemployed workers, it could have been worse. Republicans tried for a total reduction to the duration of benefits to 59 weeks. The problem is that Obama himself had initially proposed to phase out Extended Benefits at the beginning of 2011, so Democrats had little leverage to use in negotiations.

Michigan will not be the only state to be affected by the new bill. Missouri, Massachusetts, South Carolina, Tennessee and Oregon will see their Extended Benefits stop in April.

The Michigan Department of Unemployment Insurance is struggling with the high volume of unemployment benefits claims reaching the agency. Generally, the agency encourages workers to claim online or over the phone, but the Michigan UI Department recently issued a press release announcing that staff will be available for in-person inquiries at their local Problem Resolution Offices.

To deal with increase in claims volume, the agency has increased the opening times for their on-site, telephone and online customers. The new opening times for Saturday, for instance, are now from 8 in the morning to 2 in the afternoon.

Well, at least one company has more work than it can handle in Michigan.

The agency stated that seasonal layoffs and changes in the unemployment insurance eligibility requirements as chief reasons for the rise of claims in an otherwise positive national employment climate.

To say the last months have not been full of good news for Michigan unemployed workers is an understatement. In March of 2011 a bill was passed that reduced state unemployment insurances from a maximum of 26 weeks to 20. In December another bill was passed that significantly relaxed the definition of voluntary leave, an employment termination type that does not allow the worker to claim for unemployment benefits. This bill also changed the definition of suitable job, which made it easier for workers to get disqualified for unemployment benefits if they refused practically any type of job at all.

Even the good news that the unemployment rate is at 9.3 percent, a record low since 2008, spells trouble for those who are still unemployed. Why? The new unemployment rate disqualifies Michigan unemployed workers from the Federal Extension Benefits program, which will cause 29,500 workers to lose their benefits.

This may come as a surprise to unemployed workers who breathed a sigh of relief when they heard that Congress had reauthorized federal unemployment insurance in December. What many people did not realize is that Congress slipped in a reduction in the duration of the benefits.

Not surprisingly, this shortening of unemployment benefits was not highlighted by Congress in their press releases, which were too busy emphasizing the bipartisan compromise that allowed the extension of benefits. What are the consequences of this change in the Extensions Benefits program? How can you calculate how many weeks you will receive? We will discuss these and other questions related to the federal unemployment benefits change in our next article.

Michigan’s Unemployment Insurance Agency has fully entered the 21st century and created its own online channel. The UIA is trying to use the power of the internet and video to educate workers and employers about the services offered by the agency.

Instead of using the popular YouTube video platform, Michigan UIA included a section in its website for webcasts where workers can view or download the instructional video they need.

You don’t need a special program to view these videos. The Michigan UIA website is powered by Mediasite, which provides an inbuilt video viewer.

These webcasts provide help in a variety of subjects, such as news related to unemployment in Michigan, resources available to displaced workers, how to file for unemployment benefits and what payment options workers can chose from.

For instance, a recent webcast provides a report on the changes to the Michigan Unemployment Security Act brought on by the Public Act 269 enacted on December 19, 2011.

If you are a Michigan worker, I recommend you view this webcast. It provides important information about how this new law affects the payment of benefits to unemployed workers in Michigan. If you haven’t got the 16 minutes it takes to view this video, here is summary of the main points.

- Unemployed workers who were not working full-time will see their benefits reduced by 40 cents for every $1 earned in a week. This is actually good news. Previously the reduction was of 50 cents.

- Unemployed workers who were not working full-time cannot receive in a week more than 1.6 times the weekly benefit amount. Previously the limit had been 1.5 times.

- Severance pay will no longer be excluded from wages for unemployment benefits qualifying purposes. This will help borderline cases that would otherwise not qualify for benefits.

- Workers receiving benefits must, starting from January 1, 2013, carry out a systematic and sustained search for work every week they file a claim for benefits. This search can be audited by reporting to MARVIN, by mail or by reporting directly to an UIA office.

- Workers who are unavailable for work do not qualify for benefits. The new rules define a worker as unavailable if they do not update the contact information of a chargeable employer, does not respond within 14 days to a mailed notice or if mail is returned to the UIA as undeliverable or the claimant telephone number on record is no longer the claimant’s number.

Taxes are one of those constants of life, on par with death, toast always falling on the buttered side and other unalterable axioms. This holds true even when you are receiving unemployment benefits. The only silver lining to this sad fact is that Michigan’s Unemployment Insurance Agency makes declaring your taxes as painless as possible by allowing you to download your 2011 1099-G statements online.

1099-G taxes

If you are new to unemployment or haven’t had to file your own taxes before, you might be new to 1099-G statements. 1099-G statements provide unemployed workers with the total taxable unemployment compensation they have received during the previous year. These statements also include a report of any state and federal income tax deductions withheld during the same tax year. Notice however that withholding taxes from your unemployment benefits is optional and you must request the unemployment insurance agency, if you want your taxes deducted from each payment. If you wish to view your 1099-G statements you must visit the Michigan Unemployment Insurance Agency and click on the link for 1099 forms. 

If you are more of a snail mail person, don’t worry. The Michigan UIA will also sell a hard copy of the 1099-G statement to all workers who received benefits by the end of January. Remember the IRS will also receive copies of your 1099-G statements and will expect an accounting of any differences between your tax forms and your 1099-G statements.

1099-G Issues

The 1099-G statements provide a total of taxable income and withheld taxes, but it does not include any payments to fulfill a court order or to satisfy an unemployment compensation overpayment bill. If this is the case the total income registered in the 1099-G may not reflect the income you actually received. Contact the Internal Revenue Service if you are in this situation and ask them to explain how you this affects you.

Other Services

The Michigan Unemployment Insurance Agency offers several other online services to unemployed workers and employers through its website. For instance, if you wish to view your unemployment compensation history, file for a new claim, certify your benefits through MARVIN or solve a problem through Michigan’s UIA Virtual Problem Resolution forum, you can do it directly from the UIA website.

Specially designed tutorials are available at Michigan’s UIA website under the “Webcasts” tab for those who are struggling with the claiming and filing process of their benefits and taxes. However, if you have any questions, please feel free to leave us a message and we will publish an answer in the blog or send you a link of an article that has already dealt with the same topic.

The estate of Michigan provides unemployment compensation to those who meet the requirements. You may receive benefits for a minimum of 14 weeks and up to a maximum of 26 weeks unless the unemployment

Compensation benefit is based on family benefits. If this is your situation payments can not be received for more than 7 weeks. The actual amount that you can receive is not more than $362 and not less than $81. First you must make sure that you are eligible for benefits and the first thing to check is your wage record during the base period. If you are not sure what that is, don´t worry it is not difficult to discover your base period. Just look back to the last 5 calendar quarters before you claim for unemployment benefits. The first four of these is considered to be your base period and the quarter when you earned your highest wages is the one which decides the weekly amount that you will receive. If for some reason you find that you don´t qualify on that basis there is another way you could qualify for benefits. This is by counting the four calendar quarters immediately before you file your claim.

The alternative base period could be used to qualify you for benefits – this is called The Alternative Earnings Qualifier and you can be accepted on that basis if you had earned wages in at least two quarters and the total amount earned was above $13,564.60. It may be your case that you apply again for benefits less than six calendar quarters after your last benefit year finished.

The benefit year is 52 consecutive weeks starting when you file for benefits. If you subsequently worked before the present benefit year began and your employer paid not less than 5 times the amount you were receiving during your previous benefit year, you can be accepted as qualifying for benefits. At this moment you qualify financially for benefits – however it is also required that you are ready and willing to work if a suitable job is offered and you should be actively looking for employment.

The weekly amount you receive in benefit payments can include those who depend on you for example a spouse (husband or wife) or a child. The amount for each dependant is $6 and as many as 5 dependents may be added. As we said before, the earnings you received in your high quarter are your basis for the amount you will get each week as benefits.

To make the calculation you just multiply this high quarter amount by 4.1% (0.041) and round it down to the nearest dollar. Add to the total the amount you are due for dependents and that will be your weekly benefit amount. If you would like to calculate the number of weeks that you can claim benefits you can do so by multiplying you total base period earnings by 40% (0.4) and dividing this total by the Weekly Benefit Amount.

This series of articles provides practical information on the programs available to unemployed households in the state of Michigan. Our previous article focused on programs that offered information and access to resources offered by other agencies. This article highlights programs offered directly by the government and private agencies that promote them.

Job Assistance

The state of Michigan has two main job assistance programs: Michigan Works! and Talent Bank Help Line. The Michigan Works! program is an employment database which links workers and employers and provides workers with access to educational and training programs. This includes assistance with preparing resumes, recommendation letters and to prepare for job interviews.

The Talent Bank Help line is also managed by Michigan Works! but allows citizens to access job assistance services over the phone instead of the internet.  To access this program call 1-888-253-6855 or visit www.michworks.com.

Unemployment Insurance Agency

The Michigan Unemployment Insurance Agency is Michigan’s primary source of financial assistance for unemployed workers. However, this service is not for everyone. You must meet financial and legal requirements to qualify for unemployment benefits. For instance, to qualify for benefits you must have received a minimum amount of income set by the Unemployment Insurance Agency, have lost your job due to no fault of your own and be willing and able to work.

Utility Assistance Programs

The state of Michigan offers low-income citizens help with their utility bills through four main programs: Consumers Energy (1-800-477-5050), DTE Energy (1-800-477-4747), SEMCO Energy (1-800-624-2019) and the Michigan Energy Assistance Directory. The Michigan Energy Assistance Directory  is an online directory which offers information on both private and public energy assistance programs. Visit www.dleg.state.mi.us/mpsc/winterwise/energy_assistance.htm for more information.

The services offered by these programs include financial assistance to cover energy expenses, grants and low-cost loans for home improvements to save on energy consumption, such as insulation, solar and wind energy. Other programs allow Michigan workers to average out their energy bills throughout the year as a type of saving plan for the higher energy costs of the winter months.

These programs are not available to everyone. You must meet certain financial requirements, such as your income level, and the assets available to you. Visit the official websites of these programs (links above) and find out how much you could get in help for you and your family.

Are you in a situation where working is costing you money? Where having a job is actually maybe worse than not having one at all? This seems to be the situation of one of our readers’ son. We received the question below from Tammy Nelson and thought it was such a good question we should publish the answer for others in similar situations to read also.

I just have a question. My son receives unemployment but also has a job. He worked 2 jobs and lost 1, that’s why he receives unemployment. His job has been scheduling him only 1 day a week and it’s hurting him financially. Can he get denied his unemployment if he quits that other job? Also, what if he gets a part time job in another state, can he transfer his unemployment benefits, or how does that work?

Although we would need more information on the specific circumstances of Tammy’s son, the quick answer is he can get denied unemployment benefits if he quits his job. The Michigan unemployment insurance program is for workers who lose their job out of no fault of their own and quitting because you feel you will get more money from unemployment benefits qualifies as “your fault”. However, this doesn’t mean Tammy’s son does not have options.

First, you could apply for unemployment benefits based on the loss of your first job. Of course, you will need to meet the eligibility requirements set by the Michigan Unemployment Insurance Agency. These include financial and legal requirements such as the reason you left your first job and how much income you earned during your base period. Click here for more information.

Second, you can ask your current employer to join the state shared work program. This is a program for companies who are forced to reduce the work hours they can offer their employees. From what you mentioned in your comment, this seems to be what is happening in this case. The employer can then apply for financial assistance for their workers and bring their wages to the equivalent of unemployment benefits.

About the part time job in another state, the same rules apply as if he worked in the same state. If he is on unemployment benefits and is working, he will need to declare his income. Each unemployed worker on benefits has an amount of income he can make while on benefits without any deductions taking place, but whatever you make over this amount is deducted from your benefits dollar for dollar.