Payments

First Benefit Payment

The first payment is issued approximately three weeks after an application for UI benefits is processed, if all the eligibility requirements are met. Payments may be delayed until all outstanding issues are resolved.

Method of Payment

When you file an unemployment insurance claim and have selected to receive payment by an Iowa Workforce Development (IWD) Debit Card a card will be mailed to you.  The card will not expire for three years, so please do not destroy the card. If you have received a card in the last three years, the card is still valid and payments will be issued to that card.  The IWD Debit Card provides the quickest form of payment for unemployment benefits.

The benefit payment is deposited three to four business days after the weekly claim is filed, if all eligibility requirements are met. Holidays may delay the payment.

The IWD Debit Card is issued and serviced by Bank of America. A new card may take seven to ten business days to arrive. Through Bank of America’s  website, you can:

  • Check your account balance
  • Review transaction history
  • Sign up for balance alerts (text messages and email)
  • Sign up for notification of deposits by email

You can also download the Bank of America mobile app to manage your debit card.

Bank of America customer service is available 24/7 for card inquiries at:

Important Information

  • Only IWD can update an individual’s personal information with Bank of America.
  • Address or name changes should be reported to IWD.
  • Card account balance and transaction history are not available to IWD staff.
  • To report a lost or stolen card or order a replacement card, Bank of America must be contacted directly by the individual.

direct deposit

You may choose to have your UI benefit payment(s) deposited directly into a checking or savings account.  The benefit payment is deposited four to five business days after the weekly claim is filed, if all eligibility requirements are met.  Holidays may delay the payment.

In order to receive payment(s) into your checking or savings account, it is your responsibility to enter your account information when you file an unemployment insurance claim.  This is only currently available for claims filed after March 31, 2019.

IWD will not update or make changes to your account information.  Before submitting your direct deposit information it is your responsibility to verify:

  • The bank routing number with your financial institution
  • The account number is correct and is associated with the account you want the funds deposited.  

It is  your responsibility to verify the benefit payment was deposited into the correct account and resolve any direct deposit errors directly with your financial institution. IWD is not responsible for incorrectly reported routing and/or account information. Funds that are deposited into an incorrect account may not only delay your payments, but also may not be recovered or returned to IWD or you.    

In an effort to safeguard sensitive information, IWD will have limited access to updating account information.  IWD will not accept any paper forms to change account information. If you do not enter your account information online when you file an unemployment insurance claim application, the IWD Debit Card will be the default payment method.
 

Direct deposit cannot currently be added to an unemployment insurance claim unless you filed a claim after March 31, 2019.  We are working on making updates to allow our customers to add and make changes to direct deposit at anytime while filing for unemployment insurance.  Those options should be available in the next few months.

Other Deductions

Child Support Deduction

The Child Support Recovery Unit may withhold up to 50 percent of an individuals UI benefit payment for a child support obligation. The individual is mailed a notification with the beginning date and the amount of the deduction. The amount withheld is included on the IRS Form 1099-G, since it was paid to another agency on the individuals behalf. Requests to modify or stop the deductions must be made to the Child Support Recovery Unit or through the court system.

Overpayment

Individuals are responsible for repaying any benefits they were not eligible to receive. Future UI benefit payments are withheld until the non-fraud overpayment has been recovered in full. If the individual is not making attempts to repay the overpayment, the debt may be recovered by withholding state and federal tax refunds, casino and lottery winnings, and vendor payments. Overpayments caused by fraud include a 15 percent penalty. All overpayments are assessed interest of 1/30th of 1 percent per day until the debt is paid in full.  Individuals with fraud debt are not eligible to receive benefits until the debt, including penalty, interest and fees have been paid in full. 

NOTE: Overpayment amounts include payments received by the individual and payments made on behalf of the individual to revenue agencies for tax withholdings or to the Child Support Recovery Unit.

UI Taxes

UI benefits are taxable. UI payments of $10.00 or more are reported annually to the Internal Revenue Service and the Iowa Department of Revenue and Finance. An Internal Revenue Service (IRS) Form 1099-G is mailed by January 31 of each year. This form  provides important tax information that must be reported on the state and federal income tax returns, such as the amount of benefits paid during the tax year and the amount of state and federal taxes withheld.

IWD can withhold 10 percent of the benefit payment for federal taxes and 5 percent for Iowa taxes. Individuals elect tax withholdings on their application for UI benefits. To make changes in tax withholdings, the Tax Withholding Agreement Form 60-0351 must be submitted to IWD. 

Individual