What You Need to Know About Unemployment Benefits

I was laid off from my job and am wondering whether I can receive unemployment benefits. How do I sign up for them?

To qualify for unemployment benefits, you must be out of work through no fault of your own and be actively looking for a job. File for benefits as soon as you lose your job so you don't miss out on any money.

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The size of your weekly benefit varies depending on the state and your previous income (the higher your income, the higher your benefit). In Maryland, for example, the weekly benefit ranges from $25 to $380. You apply for benefits in the state where you worked, even if you live in another state.

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If you qualify, you normally receive your first check within three weeks of applying. But these are not normal times. More than 4.8 million people were collecting unemployment benefits in mid January, the highest number since the Department of Labor started keeping track of these figures in 1967.

State unemployment offices have been inundated with requests for payments, and it can be difficult to get through on the phone. Pennsylvania, for example, expanded its unemployment office's call-center hours (it now accepts calls on Sunday) and recommends calling on certain days based on your Social Security number. (Some state unemployment offices are adding staff -- making them great places to find work in this economy.)

To speed up the process, most states recommend that people file online rather than over the phone or in person. Use this unemployment benefits map for links to your state agency and its online claim form. Your state's unemployment-benefits Web page will also provide details on how to apply for benefits, how to file an appeal and what you need to do to maintain your eligibility.

Keep in mind that unemployment benefits are currently taxable, but taxes are not automatically withheld. You can elect to have taxes withheld from your checks, or you can set aside extra money so you aren't surprised by the tax bill later. And keep an eye on your state's unemployment-benefits Web site for updates -- several provisions in the federal stimulus bill could affect the length, terms and taxability of unemployment benefits.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.