Indiana Unemployment Insurance Laws

Changes in 2011

Unemployment Insurance Changes Affect Both Employees and Employers




Those currently receiving unemployment benefits (as of 7-1-11) will continue to receive the same weekly benefit amount. The new 2011 laws will not affect your eligibility or benefits.

Changes to Eligibility – July 1, 2011
On or after July 1, 2011, the following individuals who become unemployed will not be eligible for benefits:
• People who work on an on‐call or as‐needed basis (when they are offered work for the week)
• Workers employed at a business during a planned short‐term shutdown
• Employees of head start programs who are on planned breaks such as summer vacation.

Pension, Retirement, Annuity Distributions– July 1, 2011
Beginning July 1, 2011, distributions from pension, retirement or annuity plans will not be counted as "deductible income" if the money is used to satisfy a severe financial hardship resulting from an unforeseeable emergency due to events beyond your control. If this money is not used to satisfy a severe financial hardship, a dollar‐for‐dollar deduction will be taken from your weekly benefit payment.

Changes to Eligibility – October 1, 2011
On or after October 1, 2011, employees who accept payment in exchange for voluntarily resigning or retiring are no longer eligible for unemployment insurance.

Changes to Severance Pay – October 1, 2011

Beginning October 1, 2011, any amount received in severance pay will be deducted from weekly unemployment insurance benefits.
- For example: If someone is eligible for $300 a week in UI benefits and receives $200 a week in severance pay, the severance pay will be deducted from their weekly UI benefit. They will collect $200 in severance pay and $100 in UI benefits.

New Tax Withholding Options ‐ January 1, 2012
Beginning January 1, 2012, individuals may choose to have state and local taxes withheld from their weekly unemployment insurance benefits.

Changes to Benefit Calculation – July 1, 2012
New claims filed on or after July 1, 2012 will be calculated based on annual income. The maximum weekly benefit amount will remain $390.

This is a copy of the announcement from the Indiana Department of Workforce Development. The announcement can also be found on the Indiana Dept of Workforce Development site.


A copy of the Indiana Workforce Development Unemployment Insurance Claimant Handbook is also available from the site.



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Legal and IRS required notice:

This article is not intended to be specific tax advice. It is intended as a general guideline only. Any specific advice should be sought from your tax professional.

CIRCULAR 230 DISCLOSURE: Pursuant to Treasury Department guidelines, any federal tax information contained in this article, or any attachment, does not constitute a formal tax opinion. Accordingly, any federal tax advice contained in this communication, or any attachment, is not intended or written to be used, and cannot be used, by you or any other recipient for the purpose of avoiding penalties




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Useful Resources


IRS Topic 418 - Unemployment Compensation

This is a link to the site


Publication 525 - Taxable and Nontaxable Income

This is a link to the site


Is Unemployment Income Taxable?

This is a link to an article by Patricia Tokar, CPA


Indiana Dept of Workforce Development

This is a link to the Indiana DWD site


Patricia Tokar, CPA Home Page











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