Unemployment Benefits For The Self-employed

Unemployment Benefits For The Self

For the first time ever, self-employed people, including independent contractors and gig-economy … workers, can receive unemployment benefits if they’ve been impacted by the COVID-19 pandemic. But it takes perseverance.

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Update : Part 2 of this article has more answers to your questions about CARES Act unemployment benefits for self-employed people.

Until now, self-employed people out of work couldnt collect unemployment benefits. Thanks to the CARES Act, passed by Congress in response to the COVID-19 pandemic and its economic impact, the self-employed can now obtain unemployment benefits if their income has been affected by the crisis.

However, this is an entirely new situation. State unemployment systems are overwhelmed, and the rules are not clear. What do you need to do to qualify for benefits? How much will you get? These and other questions abound among self-employed people now seeking crisis relief.

Attorneys And Accountants To The Rescue

Doctors, nurses, medical researchers, and public health workers are the most visible heroes in the effort to control COVID-19 and treat the sick. Among the less appreciated but also essential workers are the countless lawyers and accountants putting in long hours to make sense of all the new laws and rules to help their clients financially survive.

1. How crazy busy has it been since the CARES Act became law?

5. How different are the payments, duration of benefits, and processes for applying among states?

Can An Employer Require An Employee To Provide A Note From Their Healthcare Provider Due To Covid

Employers should not require sick employees to provide a COVID-19 test result or a healthcare providers note to validate their illness, qualify for sick leave, or to return to work. Healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely manner.

Unemployment Insurance Relief During Covid

Notice

The CARES Act gives states the option of extending unemployment compensation to independent contractors and other workers who are ordinarily ineligible for unemployment benefits. Please contact your states unemployment insurance office at the website or phone number provided below to learn more about the availability of these benefits where you live.

• Where Do I File for Unemployment Insurance?

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Are Unemployment Benefits Taxable

While there was an exemption to this rule during the pandemic, unemployment benefits are normally considered taxable income by the federal government. So if you collected unemployment benefits between March and November of 2022, youd receive a Form 1099-G from your state unemployment office in January that told you how much youd earned the previous year. Keep that form safe so you can record that information when its time to file your taxes.

Image: Depositphotos

When Youre Already Collecting Unemployment

If you are collecting unemployment based on a job you had, working freelance can impact the benefits you are receiving. For example, in New York state, you need to report income when you do freelance work, do âfavorsâ for another business, start a business, or are or become self-employed while you are collecting unemployment benefits. If you are doing other work, you may become disqualified from receiving unemployment benefits or receive partial unemployment benefits for the week you worked.

There are similar requirements in other states. In addition, in order to claim benefits, you need to be ready, willing, and available for work. Some states require that you keep and regularly turn in an employment log documenting your efforts to regain employment.

If you are receiving unemployment benefits, make sure that you know the guidelines regarding any work you engage in. Violating the requirements can result in a loss of benefits and also substantial fines if you are discovered.

The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own states laws or the most recent changes to the law.

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What Is An Offer Of Suitable Employment And How Is It Connected To Unemployment Insurance Eligibility

Most state unemployment insurance laws include language defining suitable employment. Typically, suitable employment is connected to the previous jobs wage level, type of work, and the claimants skills.

Refusing an offer of suitable employment without good cause will often disqualify individuals from continued eligibility for unemployment compensation.

For example, if an individuals former employer calls the individual back to work after having temporarily laid the individual off for reasons related to COVID-19, the individual would very likely have to accept the offer to return to work, or jeopardize his or her eligibility for unemployment insurance benefits, absent some extenuating circumstance, such as if the individual tested positive for COVID-19. The job an individual held before the spread of COVID-19 will constitute, in the vast majority of cases, suitable employment for purposes of unemployment insurance eligibility.

How Much Are Unemployment Benefits For Self

Again, the end of things like PUA benefits and disaster unemployment assistance made it much harder for gig workers and other self-employed people to collect benefits.

But things could be changing, at least for some workers. Washington State, for example, recently passed a law that gives more rights to Uber and Lyft drivers. The bill also sets up a task force to study how those workers would be paid out of the states unemployment insurance program. And in Pennsylvania, the states supreme court has ruled that Uber drivers are not self-employed and as such should receive unemployment.

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Unemployment Benefits For Self

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Update Dec. 27, 2020: President Trump has signed a $900 billion relief bill passed by Congress on Dec. 21. The relief package included an extension of pandemic unemployment benefits for self-employed workers, contractors and gig workers. However, a delay between the vote in Congress and the president’s signature meant some unemployment benefits lapsed over the weekend. We’ll update the information below as details become clear on how the relief will be enacted.

Unemployment benefits have traditionally been available only to those who work for an employer and lose a job through no fault of their own.

However, self-employed workers who have been dealing with the financial impacts of the COVID-19 outbreak and business owners who operate as an S corporation might also qualify for unemployment benefits.

When Are You Regarded As An Employee

According to the State laws, you may still be marked as an employee and suitable for unemployment advantages, when appointed as an independent contractor. For instance, in New York, if an employer hires a worker as an independent contractor, as per the law, they are still marked as an employee. Your State or Federal law determines if a person is an independent contractor or employee.

Now that you know what an employee is, you should also know about self-employment

Self-employment, in simple words, means that you work for yourself, either as a sole proprietor or independent contractor, where you represent your business and are responsible for looking for clients and handling work. Your self-employment status may differ on the kind of work you handle and the kind of self-employed individual you are.

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Unemployment Guidance For Self

Phone: 512-463-8556

TWC Advises Non-Traditional Applicants on Unemployment Process

AUSTIN The Texas Workforce Commission advises self-employed, contract and gig workers who have lost work due to the COVID-19 pandemic to apply for Pandemic Unemployment Assistance using Unemployment Benefits Services .

During the application process, when UBS asks non-traditional workers the reason for their job separation, they should select reduced hours. If their reduced hours are a result of COVID-19, they should also select COVID-19 under the disaster impact section. The system will then display questions they need to answer to complete their claim.

After completion, the system will first review the claim for regular unemployment insurance eligibility, which will result in a denial for regular unemployment benefits only. Subsequently, TWC will automatically enroll these applicants in PUA. The initial denial for unemployment insurance may cause confusion but does not affect the PUA eligibility.

Those who have already submitted claims should not reapply. They should continue to request benefit payment every two weeks while TWC enrolls them in PUA.

Applicants do not need to call TWC. Non-traditional applicants who are eligible will qualify for a base weekly benefit amount of $207, plus the additional $600 Federal Pandemic Unemployment Compensation payment per week.

• Mail: Texas Workforce Commission, P.O. Box 149137, Austin, TX 78714-9137

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What This Program Offers

Employment Insurance has a program designed for self-employed people. If you run your own business or control more than 40% of your corporations voting shares, this program can provide you with access to special benefits as early as 12 months after registering. When you need to take time away from your business to care for yourself, your children or other family members, you could receive financial support of up to 55% of your earnings, up to a maximum amount. In 2022, the maximum amount is $638 per week.

Please note that regular benefits arent available through this program.

If youre a fisher, barber or hairdresser, or if you drive a taxi or other passenger vehicle, you dont need to register for the self-employed program. People in these professions should apply for EI benefits as an employee.

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I Am About To Exhaust My Regular Unemployment Compensation Benefits What Kinds Of Relief Does The Cares Act Provide For Me

Under the CARES Act states are permitted to extend unemployment benefits by up to 13 weeks under the new Pandemic Emergency Unemployment Compensation program. PEUC benefits are available for weeks of unemployment beginning after your state implements the new program and ending with weeks of unemployment ending on or before December 31, 2020. The program covers most individuals who have exhausted all rights to regular unemployment compensation under state or federal law and who are able to work, available for work, and actively seeking work as defined by state law. Importantly, the CARES Act gives states flexibility in determining whether you are actively seeking work if you are unable to search for work because of COVID-19, including because of illness, quarantine, or movement restrictions.

In addition, if you have exhausted the 13 weeks of additional benefits available under the PEUC program, you may be eligible to continue receiving benefits under the PUA program. PUA benefits are available for a period of unemployment of up to 39 weeks, meaning that if you have exhausted regular UC and PEUC benefits in fewer than 39 weeks, you may be eligible to receive assistance under PUA for the remaining weeks within PUAs 39 week period.

I Run A Nonprofit Organization And Am A Reimbursing Employer Under My States Unemployment Insurance Program Due To The Economic Impacts Of The Covid

Contact your state unemployment insurance office to learn what options may be available for delaying reimbursement payments. The CARES Act allows states to provide maximum flexibility to reimbursing employers as it relates to timely payments in lieu of contributions and assessment of penalties and interest. The U.S. Department of Labor will soon be issuing guidance on how states should implement this provision.

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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.

Frequently Asked Questions About Ui Benefits The Basics

The pandemic benefits that Congress passed in December are set to expire on March 14. The recently passed American Rescue Plan Act , which was signed into law by President Biden, extends the following unemployment insurance benefits until September 6:

· Federal Pandemic Unemployment Compensation $300 a week on top of other UI benefits

· Mixed Earners Unemployment Compensation for people who are both W-2 employees and self-employed, they can receive an additional $100 per week

· Pandemic Emergency Unemployment Compensation after someone exhausts state UI benefits, PEUC extends the duration of benefits to 53 weeks

· Pandemic Unemployment Assistance benefits for self-employed people and other unemployed people deemed ineligible for state UI benefits, up to 79 weeks

· Short-Time Compensation or Work Sharing extends federal funding to states to make work-sharing available for employers to rehire employees who they have laid off and to help employers keep people employed who they may be thinking about laying off. Employers can supplement pay with STC payments as they slowly re-open with employees working fewer hours.

For unemployed workers who may need to pay taxes on their UI benefits, the ARPA exempts the first $10,200 of unemployment insurance benefits paid in 2020 for household incomes less than $150,000.

For additional details, see this post from our friends at The Century Foundation.

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Submit Your Documents To Twc

If TWC asked you to provide documents, you can upload them using our online UI Submission Portal.

You will need to input your personal information on the portal, then select the type of submission you want to make from a drop-down menu. The portal also provides a list of the file types you can upload. Make sure to select the Submit button at the top of the page when you are done.

WARNING: Do not use this portal to submit your appeal or any appeals documents. You must submit your appeal online using Unemployment Benefits Services , by mail, by fax, or in person at a Workforce Solutions office. Learn about submitting an appeal at: How to Appeal a Decision.

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Can I Get Unemployment If Im Self

Under normal circumstances, self-employed people like sole proprietors, independent contractors, freelancers and gig workers dont typically qualify for unemployment benefits.

But the Coronavirus Aid, Relief and Economic Security Act, or CARES Act opens the door for states to pay unemployment to self-employed people if states choose to do so.

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How Do I Apply For Unemployment Benefits

Unemployment insurance is a joint program between the federal and state governments. The federal government sets guidelines for how state programs can operate, and states set their own rules within those guidelines.

If youre self-employed and seeking unemployment benefits during the pandemic, youll need to file a claim with your state unemployment office. Youll typically file in the state where you worked. But if you live in one state and work in one or more other states, your home states unemployment agency should be able to guide you on how to file.

You can search for a states unemployment website through the U.S. Department of Labors CareerOneStop website. Depending on the state and its rules, you may be able to submit an online application, or file by phone or in person at a state unemployment office location. Check your states website to learn about its application process.

Take note that if you previously tried to file for unemployment and were denied, it may be worth contacting the state about your claim. The Department of Labor has directed states to review claims denied after Jan. 27, 2020, to identify people who may be eligible for Pandemic Unemployment Assistance.

Unemployment Benefits Under The Cares Act

The federal government has expanded unemployment benefits under the Coronavirus Aid, Relief, and Economic Security Act .

Self-employed workers who are usually ineligible for unemployment benefits including independent contractors, sole proprietors and gig workers may now be eligible. They may also qualify for additional money: the new law provides an extra $600 a week in unemployment compensation and extends benefits for 13 weeks .

Eligibility and guidelines vary by state, and you may be eligible if you are self-employed and have lost income due to coronavirus measures, or youre unable or unavailable to work for reasons related to COVID-19, such as being quarantined or caring for a sick family member.

Under normal circumstances, states require you to seek work each week that you file a claim, but the CARES Act provides flexibility if you are unable to because of COVID-19.

Due to the launch of new unemployment application systems and a surge in the number of people claiming unemployment benefits in recent weeks, some states aren’t yet able to process new claims and payments may be delayed. But there are signs that early roadblocks to filing for benefits are beginning to lift.

Contact your states unemployment insurance office to learn about who can collect benefits, how to file a claim and if any delays are expected.

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