Monday, July 15, 2024

How To File For Unemployment As An Independent Contractor

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What Benefits Do You Recieve

New federal program to help independent contractors apply for unemployment benefits

If you are eligible for PUA, you will receive up to 79 weeks of unemployment insurance payments through your state unemployment agency. Your weekly payments will be calculated according to the rules of the state you work in, provided that your weekly PUA payment is not less than half of the average weekly UI payment in the state.

The Act allows that PUA payments may cover periods of unemployment from January 27, 2020, through December 31, 2020. This has since been extended. However, the PUA benefits will end during the week that ends on September 4, 2021.

Under the Federal Pandemic Unemployment Compensation provision of the CARES Act, all unemployment recipients will also receive an additional $300 per week until September 4, 2021.

Select The Scenario That Applies To You:

  • I am an independent contractor or in business for myselfIf you are a business owner or contractor who provides services to other businesses, then you are generally considered self-employed. For more information on your tax obligations if you are self-employed , see our Self-Employed Individuals Tax Center.
  • I hire or contract with individuals to provide services to my businessIf you are a business owner hiring or contracting with other individuals to provide services, then you must determine whether the individuals providing services are employees or independent contractors. Follow the rest of this page to find out more about this topic and what your responsibilities are.

Reporting Independent Contractor Earnings

If you think that you can earn money as an independent contractor and still collect UI benefits, think again. Your earnings as an independent contractor are reported to the IRS, provided they exceed $600 in a year. Consequently, even if you dont report your earnings to the state when you collect UI benefits, the government has a way to determine if you have been double-dipping. The state and federal governments will be able to tell if you have earned money as an independent contractor at the same time you unlawfully received UI benefits.


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What Can The Claimant Do If He Or She Believes A Job Offer Is Not For Suitable Employment

If a state raises an issue of failure to accept suitable employment, the state unemployment insurance agency must provide the claimant with an opportunity to provide his or her side of the story and to rebut any evidence provided to the state before making a final determination.

Most state laws allow for refusal of suitable employment for good cause, which is defined in state law. Criteria for good cause may include, but are not limited to, the degree of risk to an individuals health, safety, and morals the individuals physical fitness, prior training, experience, and earnings the length of unemployment and prospects for securing local work in a customary occupation and the distance of the available work from the individuals residence.

Claimants may file an appeal if they disagree with a states determination regarding suitable work. Please contact your state unemployment insurance agency for additional information.

How Much Does Unemployment Pay


The amount you can receive from unemployment insurance depends on what state you work in, and what you earned before you lost work.

Under normal unemployment, a general rule of thumb is that you’ll receive about 40% to 50% of your previous earnings, up to your state’s maximum benefit. The maximum is key, and it varies dramatically, from $235 in Mississippi to $823 in Massachusetts. In February 2020, average weekly benefits were about $387 nationwide, according to the Center on Budget and Policy Priorities.

With the new Pandemic Unemployment Assistance, the minimum amount is set to half a state’s average payment. The law allows for states to send a flat initial payment to expedite the money, and then states have the option to recalculate the amount a worker is eligible for based on their earnings.

In California, for example, the initial PUA payment will be a flat $167 a week to all applicants.

All workersthose in the normal unemployment system and those in the PUA systemwill receive an extra $600 a week from the federal government between March and the end of July. So that means that in Texas, for example, where self-employed workers qualify for a base payment of $207, the total weekly payment will be $807 for now.

How long you can receive payments also depends on your state rules. Many allow for up to 26 weeks, though some limit benefits to as few as 12 weeks. Expanded eligibility under the CARES Act adds 13 weeks to states’ existing time limits.

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What If I Cant Leave My Home Because I Must Care For My Child During The Pandemic Or Because I Have Covid

An individual in any of those situations would be unemployed through no fault of theirown and might be eligible for UI benefits. However, to qualify for UI, theywould still need to meet all other eligibility requirements. For example, the individual must be able and available for work, and show that they are seeking work from home. Individuals can be considered able and available to work if there is some work that they could perform from home .This individual also must prove that they left their job due to their employer. However, there is an exception to the requirement that the reason for leaving is due to the employer. That exception is when an individual quits a job because a licensed and practicing physician deems them unable to perform the work or when their employer is unable to accommodate the individuals need to care for a family member who has been verified to be in poor health or to have a disability.

Im Partially Employed Because Im A Student And Work Part Time Doing Ride

You may be eligible for PUA, depending on your personal circumstances. A gig economy worker, such as a driver for a ride-sharing service, is eligible for PUA provided that he or she is unemployed, partially employed, or unable or unavailable to work for one or more of the qualifying reasons provided for by the CARES Act. For example, a driver for a ride-sharing service may be forced to quit his or her job if he or she was diagnosed with COVID-19 by a qualified medical professional, and although the driver no longer has COVID-19, the illness caused health complications that render the driver objectively unable to perform his or her essential job functions, with or without a reasonable accommodation. Similarly, under an additional eligibility criterion established by the Secretary of Labor pursuant to 2102, a driver who receives an IRS Form 1099 from the ride-sharing service may qualify for PUA benefits if he or she has been forced to suspend operations as a direct result of the COVID-19 public health emergency, such as if an emergency state or municipal order restricting movement makes continued operations unsustainable. Relatedly, widespread social distancing undertaken in response to guidance from federal, state, or local governments may so severely reduce customer demand for a drivers services as to force him or her to suspend operations, and thus make the driver eligible for PUA.

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I Am An Undocumented Individual Am I Eligible For Any Unemployment Benefits

In general, individuals who are not lawfully permitted to work in the United States are not able and available to work. In addition, wages earned by an individual who is not lawfully permitted to work cannot be used in establishing a weekly benefit amount. Therefore, that individual would not eligible for unemployment benefits.

What Determines If I’m Able To Work Available For Work And Actively Seeking Work

Woman shares experience filing for unemployment as an independent contractor

To be considered able to work, an individual must be mentally and physically capable of performing a job in an occupation where jobs exist.

To be considered available for work, an individual cannot impose conditions on the acceptance of work if those conditions essentially leave them with no reasonable prospect of work.

To be considered actively seeking work, an individual must reasonably try to return to work. An individual cannot refuse a suitable job offer or they could lose eligibility for benefits.

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There are two very different questions involving 1099-independent contractors and unemployment benefits:

Are you eligible for unemployment benefits if you were working as an independent contractor but the work stopped .

If you were an employee but lost your job, can you work as independent contractor while collecting unemployment benefits.

The first question is unfortunately easy to answer. An independent contractor or gig worker who becomes unable to find work is not eligible for benefits. In order to collect unemployment benefits, an individual must have been employed by an employer who was paying into unemployment insurance. That is, the person must have been an actual employee of someone . Self-employed workers do not qualify. However, since independent contractors are not employees and no one pays unemployment insurance for these workers, it is not likely that an independent contractor will be eligible for unemployment insurance benefits.

File During Odd Hours Or On Your Assigned Day

Even with unemployment dropping in recent months, states are still inundated with claims, so even when youre filing online, dont be surprised if you encounter a problem or delay during at least one point in the process. You might try applying either early or late in the day or even in the middle of the night if youre awake in order to get your claim through the system.

Some states are also asking certain groups to apply on certain days, such as Hawaii, which is requesting that people whose last names start with A through G file on Mondays, H through O on Tuesdays and P through Z on Wednesdays. Youll need to check with your state to find out its specific rules.

That being said, if youve lost your job, make it a priority to file as quickly as you can, as waiting delays getting your claim approved. Unfortunately, there arent many tricks to getting through other than being persistent.

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Know More About Independent Contractors With Multiplier

If youâre hiring a freelancer or trying to be one, you should go to the core of it. You can have many questions, including:

  • Who are independent contractors?
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Coronavirus Faqs: Independent Contractors And Unemployment Compensation


As an independent contractor, can I apply for unemployment benefits due to COVID-19?

Yes. The Coronavirus Relief Bill extends the two types of unemployment benefits established under the CARES Act that real estate professionals may be eligible for:

  • Federal Pandemic Unemployment Compensation. The FPUC now allows for a $300 benefit through March 14, 2021. Under the CARES Act, this benefit was $600, but expired in July.
  • Pandemic Unemployment Assistance. PUA is based on previous income and now provides benefits for up to 50 weeks. The Texas Workforce Commission will continue to run this program and regular state unemployment benefits under the CARES Act, until March 14, 2021. Eligible workers still receiving benefits as of March 14, 2021, would be able to keep receiving benefit until April 5 .
  • When will I receive my unemployment benefits under the Coronavirus Relief Bill?

    Per the Texas Workforce Commission , payments under this legislation are authorized to begin for the payment week ending January 2, 2021. For Federal Pandemic Unemployment Compensation, eligibility will begin on December 27, 2020, with the first payments set for the week ending January 2. If you have an existing claim, you do not need to take any further action. TWC will automatically update your claim and inform you of your potential eligibility.

    What are the criteria used for determining if I am eligible unemployment compensation?

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    How To Check Your Eligibility

    Eligibility varies from state to state, so check with your state unemployment office to find information about who is eligible to collect unemployment compensation, and how to go about filing a claim.

    When you become unemployed, its a good idea to check if you may be eligible for benefits right away. It can take time to begin receiving benefits if you do qualify, so you should file your claim as soon as possible.

    Review information on filing for unemployment compensation and use the CareerOneStop Unemployment Benefits Finder to learn about eligibility and applying for benefits in your state.

    How Long Will It Take To Receive Unemployment Benefits For Self

    Even a month after the CARES Act was signed into law, it’s unclear how long it will take for self-employed or freelance workers in most states to get their first unemployment payments.

    Once unemployment insurance applications are completed, OneCareerStop, a website run by the Labor Department, says payments typically take a couple weeks. But thats under normal circumstances within the existing state systems.

    Those existing systems have struggled to keep up with demand, though they are beginning to catch up. Stettner estimates that about 70% of claims filed since the middle of March have been processed now.

    The Labor Department announced Thursday that 10 states have begun making Pandemic Unemployment Assistance payments. They are: Alabama, Colorado, Iowa, Kentucky, Louisiana, New York, Rhode Island, Tennessee, Texas, and Utah. A spokesperson at the Texas Workforce Commission, which runs the state’s unemployment insurance program, confirmed the state has been sending out PUA payments but said it doesnt yet have statistics on the number of self-employed workers whove received benefits.

    Several other states are nearly ready to begin processing claims and issuing payments. Heres the status of applications in the largest 10 states:

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    Choose Category Of Employer

    The first step in the process of determining an employer’s obligation under the unemployment insurance law is to determine which of the following categories describes the employer:

    • General Private Employers
    • State and local government employers
    • Nonprofit employers and exempt from federal income tax under §501 of the Internal Revenue Code)
    • Trucking employers
    • Logging employers
    • Indian tribal government employers)

    Select the appropriate employer category to continue to worker classification tests:

    This Spring I Received A Letter From Ides Indicating I Had Transitioned To A New Benefit Year I Have Been Unemployed Since April 2020 Since Federal Programs Have Ended How Does This Effect My Federal Benefit Payments

    Kentucky’s self-employed, independent contractors apply for unemployment

    If you had not worked and earned at least three times your weekly benefit amount since the beginning of your first benefit year , your benefits were transitioned to a federal extension. All federal programs ended on September 4, 2021, so that was the last week of benefits payable to you. You might have also automatically been eligible for one week of extended benefits.

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    and earn an additional income to boost your unemployment benefits and help keep your skills sharp during these uncertain times.

    *The contents of this article are for informational purposes only. It is not a substitute for legal advice. Always consult a specialist before making any decisions.

    Can 1099 Employees File For Unemployment Benefits

    Unemployment benefits for self-employed workers are generally not available, but the coronavirus pandemic changed this in many states.

    By: Sean Ludwig, Contributor

    While 1099 employees previously did not qualify for unemployment benefits, the CARES Act has since created new provisions that permit it amidst the COVID-19 pandemic.

    For decades, the unemployment insurance program in the U.S. has helped provide a cushion for those who unexpectedly find themselves out of work. But what about those self-employed workers who lose their business or cant find work?

    Traditionally, 1099 workers have not been eligible to receive unemployment benefits. However, the COVID-19 pandemic changed this norm, and federal coronavirus legislation opened the door for some independent workers to receive benefits. Below we answer some of the most common questions surrounding 1099 workers and unemployment benefits that can be obtained.

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    How Do I Apply

    To receive unemployment insurance benefits, you need to file a claim with the unemployment insurance program in the state where you worked. Depending on the state, claims may be filed in person, by telephone, or online.

    • You should contact your state’s unemployment insurance program as soon as possible after becoming unemployed.
    • Generally, you should file your claim with the state where you worked. If you worked in a state other than the one where you now live or if you worked in multiple states, the state unemployment insurance agency where you now live can provide information about how to file your claim with other states.
    • When you file a claim, you will be asked for certain information, such as addresses and dates of your former employment. To make sure your claim is not delayed, be sure to give complete and correct information.
    • Find the contact information for your state’s unemployment office to start your claim.

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