Thursday, August 4, 2022

Can Business Owners File For Unemployment

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Temporary Federal Pandemic Ui Programs End On September 4 2021

Business owners, self-employed can apply for unemployment benefits on April 28

The temporary, federal unemployment insurance programs , Federal Pandemic Unemployment Compensation , Pandemic Emergency Unemployment Compensation , and Mixed Earner Unemployment Compensation Program will expire the week ending Saturday, September 4, 2021. No payments of PUA, FPUC, PEUC, or MEUC benefits will be made for any weeks of unemployment ending after September 4, 2021, even if you have a PUA or PEUC balance in your BEACON portal.

Processing of Claims for Weeks Ending on or Before September 4 Claims that include weeks of eligibility that end on or before September 4 will be processed even after the federal programs expire. Claimants will receive benefits for all weeks they are determined to be eligible for, even if a determination of eligibility occurs after September 4. If you are waiting to receive an eligibility determination for any of these four federal programs, the Department will ensure that you receive all payments owed to you for those weeks.

Extension to File PUA Claims Until October 6, 2021, the Department will accept new initial claims for PUA benefits for weeks of unemployment ending between December 12, 2020, and September 4, 2021. Claimants are only eligible for PUA benefits for weeks they were unemployed or partially unemployed because of an approved COVID-19 related reason.

Unemployment Benefits For The Self

This has been a nightmare for thousands of small-business owners. States are simply not prepared for the type of paperwork a small business owner will submit to verify their income during the same period a typical applicant would be providing a cancelled check or W-2.

We have had clients across the country get rejected for unemployment benefits and others fly right through with success. The most important takeaway is to not give up! If you deserve benefits, keep fighting with the state. Make sure you have your 2019 1040 Schedule C filed, and jump through any hoops necessary to prove what you made last year so the state agency can try and calculate your unemployment benefit.

Before I get to the steps and strategies you could employ to get unemployment benefits, its important to know what the benefits are. You want to do the calculations and determine the cost benefit of different strategies under the CARES Act, including unemployment.

Some of our clients are walking away from the business for three-to-four months and claiming unemployment, while others are applying for the PPP but having their spouse or family members claim unemployment because they were previously on the payroll of the business.

So in order to do the math and properly consider if seeking unemployment benefits is worth it, here are the amazing provisions of the new law:

  • If you have rank-and-file employees you had to furlough or terminate, its up to them to claim unemployment, which they probably will.
  • Eligibility For Unemployment Benefits

    In most states, in order to be eligible for unemployment benefits an individual must meet certain requirements. You must be physically able to work, available to work a full-time job, actively seeking employment and unemployed through no fault of your own. You must report to your local employment service office and complete weekly or bi-weekly claim forms as required.

    Despite meeting these criteria, self-employed individuals who own small businesses may not qualify for benefits. Your state employment office will determine if you are entitled to file an unemployment insurance claim.

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    Pandemic Unemployment Assistance Program

    Under the Pandemic Unemployment Assistance program stipulated in the CARES Act, states can extend the amount of time you can receive benefits for 13 weeks to a maximum of 39 weeks .

    Note: The PUA also provided an extra $600 a week in compensation. However, this benefit expired on July 31, 2020. Congress is currently working on new legislation regarding further benefits. We will update this article with the newest information as soon as legislators reach a deal.

    Types Of Disability Policies

    Can A Small Business Owner File For Unemployment?

    There are two types of disability policies.

    • Short-term policies may pay for up to two years. Most last for a few months to a year.

    • Long-term policies may pay benefits for a few years or until the disability ends.

    Employers who offer coverage may provide short-term coverage, long-term coverage, or both.

    If you plan to buy your own policy, shop around and ask:

    • How long do benefits last?

    • How much money will the policy pay?

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    Work Search Requirement Reinstated

    On Sunday, July 4, Maryland LABOR reinstated the standard active search for work requirement for all claimants receiving regular unemployment insurance benefits. Claimants receiving benefits under the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation federal programs must meet the active search for work requirement beginning Sunday, July 18, 2021.

    All claimants must actively search for work by completing at least three valid reemployment activities each week, which must include at least one job contact. Claimants must satisfy the active search for work requirement to maintain their eligibility for UI benefits.

    Valid reemployment activities are intended to help a claimant become reemployed and remove potential barriers to employment. Qualifying activities include, but are not limited to: activities completed through the Maryland Workforce Exchange , such as setting up a virtual recruiter or completing a skills self-assessment attending networking events creating a résumé in MWE and attending employment events held by the Maryland Division of Workforce Development and Adult Learning . For a full list, see .

    Job contacts refer to actions a claimant takes to contact employers in an attempt to secure employment. Acceptable job contacts include: submitting a job application to an employer interviewing for a job or completing a pre-screening for a job interview among other actions.

    In Most Cases Using Or Claiming Unemployment Benefits While Starting An Llc Is Not A Good Idea

    Most state unemployment agencies are likely to take a dim view of continuing to pay unemployment while you try to start a new business. This is likely due to your lack of availability to look for other paying work.

    Some state unemployment agencies will not be favorable to you using unemployment benefits to fund your new business. Remember, too, that you will need to report any income your new LLC generates, and that the unemployment agency will likely reduce your benefits by that amount.

    In some states, the business activities of your new LLC must be different from the business activities of your former employer to allow you to file and claim unemployment.

    We strongly recommend contacting your state unemployment agency and speaking to someone about what your options are. Explain the situation youre in, and ask what you need to do to remain compliant with the law so you can continue claiming unemployment benefits. Do not try to hide your new business. Its always best to be open and transparent about your plans, answer questions from your state unemployment agency and comply with their requirements.

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    Fraudulent Unemployment Insurance Activity

    Report Fraud

    With the record number of unemployment insurance claims filed during the COVID-19 pandemic, Maryland, and states across the entire country, have seen an increase in activity by bad actors and fraudsters using illegally obtained data to file fraudulent unemployment insurance claims. Please note that there has been NO breach in our BEACON unemployment system.

    If you believe that your information has been used to fraudulently file an unemployment insurance claim, please contact the Division of Unemployment Insuranceâs Benefit Payment Control Unit by completing a âRequest for Investigation of Unemployment Insurance Fraudâ form and e-mailing it to .

    If you received a 1099-G tax form, but did not apply for unemployment insurance benefits in Maryland in 2020, then please complete this Affidavit form and submit it along with picture ID to the Benefit Payment Control Unit by e-mailing .

    If you are an employer and believe a fraudulent claim has been charged to your account, please file a benefit charge protest through your employer portal.

    If you believe fraudulent transactions have been made on your Bank of America Debit Card, please contact the Debit Card Customer Service Center at 1-855-847-2029 to file a report and request a replacement card.

    Avoid Scams

    Avoid Scams on Social Media

    Links to the Maryland Department of Laborâs official government agency social media pages can be found below:

      Identity Theft Resources

      Reapplying For Unemployment Insurance Benefits

      Applying for Unemployment Assistance for Independent Contractors & Business Owners in California

      If you are not able to file your weekly claim certification this week, please check your BEACON portal to see if you have an âApply for Benefitsâ button. If you have this button, there could be several reasons including, but not limited to:

      • You did not apply for benefits last week,
      • Your benefit year has expired , or
      • Your monetary eligibility needs to be redetermined.

      Even if your account is active and you have a balance, if you have an âApply for Benefitsâ button, then you need to re-apply for benefits to be able to file your weekly certification as required by Maryland unemployment law and federal program rules.

      If you wish to re-apply for benefits, you should access your BEACON portal from an internet browser, click on the âApply for Benefitsâ link on your home page, and follow the steps. You cannot complete this process from the MD Unemployment for Claimants Mobile App.

      Reminder: Claimants have through Saturday, June 12 to file their weekly certification for the week. If you have successfully filed your weekly certification this week, please ignore this message. There are no issues with the BEACON system.

      Reapplying for Unemployment Insurance Benefits in BEACON 2.0 FAQs

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      The Basics Of Unemployment Benefits

      Unemployment benefits are a form of unemployment insurance meant to provide temporary financial assistance when you lose your job through no fault of your own. Its a joint program between states and the federal government to provide out-of-work Americans with cash.

      Each state has its own set of rules and requirements for unemployment benefits, including how long youve been out of work, how much you earned and the conditions in which you lost your job. For instance, if you were fired for poor performance, youre not eligible for unemployment benefits.

      Alternatives To Unemployment Benefits For Business Owners

      If you donât qualify for unemployment benefits as a business owner, it can be a tough hit, especially when youâre in financial trouble from the closure of your business. Although theyâre different in nature, there are some alternatives to consider that may help you float your business in the interim.

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      Applying For Unemployment Benefits:

      When you get to know that youre eligible to collect benefits, youll apply directly to your local state office. The government doesnt deal with unemployment claims. The state will send you two forms to fill one that you complete as an employee and one for your business.

      Different states require various credentials for application processing. In any case, you should accumulate the following mentioned documents:

      • Business and personal tax returns
      • Your Employer Identification Number
      • Annual income on a pay stub

      The Sooner The Better

      Can a Business Owner File for Unemployment?

      Many states have a waiting period, both before you file for benefits and before you begin receiving them. In the wake of the pandemic, most states are waiving these restrictions, allowing immediate applications and benefits to begin within a week.

      Again, be sure you check with your states unemployment laws during this evolving situation.

      In the meantime, heres a general overview for LLC owners wondering if and how they can collect unemployment benefits.

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      Can A Business Owner File For Unemployment

    • Other
    • Can a Business Owner File for Unemployment?
    • When a crisis strikes, such as a natural disaster or a pandemic, many businesses may be forced to close. This would normally be because they dont fall under the bracket of an essential business. But this could also be due to decreased income or lack of available employees.

      We have seen this recently with the coronavirus pandemic. Across the country, hundreds of thousands of Americans had to file for unemployment.

      But if you are the sole proprietor of your business and you are forced to shut, are you eligible for unemployment benefits?

      Well take a look at the rules and what your rights as a business owner are.

      Heres What Well Cover:

      Can You Collect Unemployment If You Have A Side Business

      Under most regular unemployment insurance regulations, independent contractors and self-employed workers cant collect unemployment benefits. But the CARES Act, which expired at the end of 2020, provided relief to freelance workers, independent contractors, self-employed workers and small-business owners who wouldnt otherwise qualify.

      Since 2020, Congress has passed two pieces of legislation that extend the unemployment insurance benefit period for individuals who are self-employed, including those with side businesses.

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      What Are The Upsides And Downsides To Contesting A Claim

      The most compelling reason to contest a claim is that an employers unemployment insurance tax rates could go up. The amount of taxes owed is based in part on the number of claims made against the company by former employees, so if there is a concern regarding this, it can certainly be worth fighting the claim.

      On the other hand, trying to deny a claim may be a costly endeavor. A former employee could file a wrongful termination suit against your company or fight for the claim through a drawn-out appeals process. So in certain cases, it may simply not be worth your companys time.

      CO aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

      for more expert tips & business owners stories.

      COis committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

      Can A Fired Employee Collect Unemployment

      File California Pandemic Unemployment Assistance PUA | Small Business Owner | 1099

      Businesses may wonder if they should expect unemployment claims from fired employees. They should not, as unemployment insurance is generally only available for those employees who have been laid off through no fault of their own. If an employee was fired for misconduct or a company policy violation, they are very likely ineligible to collect benefits. Some examples of fireable causes that would exclude an employee from collecting unemployment insurance include:

      • Stealing.
      • Criminalbehavior.

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      Impact On Your Business If You Do Not Elect For Optional Coverage

      Unless you elect for optional coverage for a noncovered owner/officer, you should not report wages paid to these individuals on quarterly wage detail reports or pay Minnesota UI tax on their wages. This applies ONLY to Minnesota state unemployment tax.

      You should contact your accountant or tax advisor to obtain more information on:

      • What effect this change may have on other employment taxes, such as federal unemployment tax .
      • How the exclusion of these owner/officer wages from Minnesota UI tax may increase your FUTA tax liability.

      How The Cares Act Affects Unemployment Benefits

      After federal lawmakers passed the Coronavirus Aid, Relief, and Economic Security Act , unemployment benefits were expanded significantly. The Pandemic Unemployment Assistance provision allows many self-employed workers to receive unemployment benefits who normally wouldn’t, including sole proprietors, independent contractors, and gig workers.

      The CARES Act also extends unemployment benefits for 13 weeks and provides an additional $600 a week in compensation.

      Small business owners qualify for unemployment in the same way that other individuals do through the CARES Act. In short, you must be out of work due to direct COVID-19 impacts such as required business closure. You can apply for unemployment benefits with your state. Note that some states will require you to apply and be rejected for the typical unemployment benefits before you can apply for pandemic unemployment assistance.

      Learn more in FindLaw’s Unemployment Insurance and COVID-19 section.

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      Claimant And Employer Contact Information

      The Division of Unemployment Insuranceâs website and call centers are currently experiencing an unprecedented volume of users due to COVID-19. This may result in longer than usual wait times. We apologize for any inconvenience and thank you for your patience during these uncertain times.

      Please be assured that Maryland does not have a waiting week like many other states do. No matter when or how they file, Marylanders become eligible for benefits starting the day after they separated from employment. Your payment will be backdated to the date you became unemployed, not when your claim was processed. If you are determined to be eligible, you will be paid for all benefits due.

      You Must Be Actively Seeking Work And Able To Accept Employment Consistent With Your Skills And Training

      Business Owners &  Independent Contractors Can Apply for ...

      Most states require you to actively be looking for work to provide you with unemployment benefits. This means you should be spending your time updating your resume, looking for positions, applying for roles and attending interviews. If you limit when you can work, unemployment benefits could be reduced or withheld.

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      How Do You Apply For Pandemic Unemployment Assistance

      If you are eligible for unemployment insurance, your benefits will be administered through your state’s unemployment office.

      It is important to note that many states are currently in the process of updating their information and UI rules. For more information about unemployment benefits call:

      • 1-877-US2-JOBS .
      • TTY 1-877-889-5627.

      Can Small Business Owners Collect Unemployment

      Learn more about the Pandemic Unemployment Assistance program, its benefits, qualifications, and application process.

      The SMB Guide is reader-supported. When you buy through links on our site, we may earn anaffiliate commission. Learn more

      According to the CARES Act, self-employed people affected by the COVID-19 pandemic are eligible for Pandemic Unemployment Assistance.

      While many businesses in the U.S. are feeling the effects of forced closures and coronavirus lockdown measures, small business owners and independent contractors are being hit the hardest.

      Prior to the passing of the CARES Act, gig workers, independent contractors, and self-employed individuals were not able to claim unemployment benefits. Thankfully, the Coronavirus Aid, Relief, and Economic Security Act addressed this issue.

      How Much Will You Get?

      The amount you receive will be based on your previous income and varies depending on the state you live in. Those who are eligible will receive an additional $300 per week from the federal government for a period of four months. This is over and above any benefits provided by the state.

      If you live in California for example, the maximum state benefit amount is $450 per week. With the additional $300, self-employed Californians that are out of work due to coronavirus would be eligible for benefits up to $750 per week.

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