California Unemployment Insurance

The Employment Development Department (EED) oversees the calculation and distribution of California unemployment insurance.  The Unemployment Insurance Program is funded through employer payroll taxes and distributed to out-of-work residents who cannot afford essential items.  Professionals from the Bay Area to San Diego should be acquainted with California unemployment insurance in these troubled times.

Every worker under the threat of unemployment should start to understand California unemployment insurance by reviewing the term base period.  This period is a 12-month qualifying period where applicants need to meet minimal income requirements before receiving unemployment insurance.  The EED breaks the base period into four quarters, choosing the quarter with the highest wages to determine unemployment insurance rates.

EED reviewers require applicants to have earned at least $1,300 in the peak quarter of the base period.  If a claimant cannot meet this standard, EED allows the highest quarter to be a minimum of $900, as long as total earnings during the base period exceed $1,125. 

EED assumes that the most recent period of employment in the base period may feature lower wages, eliminating at least the last three months when assessing the base period.  The ceiling for unemployment insurance claims through EED is the lesser of 50% of the base period wages or 26 times the weekly benefit amount entitled to the application.

California’s unemployment insurance is a wide net cast over various professional classes.  In addition to employees of medium and large businesses, California accepts claims from government workers, farm hands, and Indian tribe members.  The state’s unemployment insurance has been broadened in the last six decades to reflect the diverse nature of the Californian economy. 

Once a California resident accepts unemployment insurance from EED, it is important to understand state and federal tax requirements.  California does not tax income from unemployment insurance, but sends out statements each year to residents.  The federal government taxes income from EED insurance each year, and the California form comes in handy when filling out next year’s tax return. 

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