She’s the firm’s, America's Top Givers: The 25 Most Philanthropic Billionaires, Impact 50: Investors Seeking Profit — And Pushing For Change. Pandemic Unemployment Assistance (PUA)The Pandemic Unemployment Assistance (PUA) program temporarily expands unemployment benefit eligibility to self-employed workers, gig economy workers, part-time workers, and others impacted by the COVID-19 pandemic who might not otherwise be traditionally eligible for unemployment benefits.The Pandemic Unemployment Assistance (PUA) … I do some part-time work as an employee and receive a W-2 for it. It’s a complicated process, made even more complicated given the sheer number of people trying to get benefits at the same time. Teleworking: A Fixture For The Future? States first have to wait for the Trump administration to issue guidance so they know they’re administering a benefit correctly. If you were full-time and see your hours reduced due to COVID-19, you may be eligible ... What if I am self employed? 11. Some of those programs are already accepting applications and preparing to send out checks while others are still being built. Independent contractors, the self-employed and gig workers like Lyft and Uber drivers are eligible to collect unemployment benefits under the $2.2 trillion coronavirus relief law. Similarly, if the EIDL is used for expenses other than your own payroll (e.g. “At this point in time, I don’t have a number, but we want to make sure those who are unemployed have the ability to support themselves and their families.”. But with rent and bills looming when May 1 rolls around next week, many people are wondering whether they can wait that long for their states to get things together. If they experience “a significant diminution of work as a direct result of COVID-19,” gig workers can collect benefits under the PUA. Any interaction between the programs should be dealt with carefully, and you should consult with your own lawyers and accountants before making any disbursements. All Rights Reserved, This is a BETA experience. [For more details on this situation, see a Los Angeles Times article by Kim Christensen.]. Is it the ratio between them or the amount of my W-2 income that matters? Show full articles without "Continue Reading" button for {0} hours. This article offers more of her insights. I did all my contracting work in a different state than where I now live. As with any federal program, recipients should be prepared to show how funds were used and for what purposes. On the EIDL, similar to the PPP, you should be careful to not “double dip.” EIDL funds have a wider breadth of uses than the PPP, so you can apply for both the PPP loan and an EIDL as long as you don’t use the funds to cover the same expenses. It could very well be you are able to work one week and will not qualify for or need the PUA benefits, but the following week you cannot find as much work (or any at all). data or design work needed from others), how do I report weeks when I’m working vs not working? See below for more information. Self-employed in this context isn’t the same as a sole proprietor (i.e. Unfortunately you cannot choose what program to elect. Freelancers and independent contractors, previously excluded from these programs, now qualify through the end of July — and possibly beyond if Congress extends the program. You will need to provide copies of those documents to the state unemployment agency if requested. 13. Is it possible to have overlap, e.g. BUC - Pandemic Unemployment Assistance (PUA) Pandemic Unemployment Assistance (PUA) provides unemployment coverage for the self-employed and others not normally covered by state unemployment insurance. “These benefits are layered on top of a system that works well in some states and works terribly in others,” said Evermore. 7. When authorized by the President of the United States, Disaster Unemployment Assistance (DUA) may also be available for workers and self-employed people who do not qualify for regular UI benefits. Date: April 22, 2020. A Look At The Impact On Tax, Why Biden Has The Right Covid Relief Strategy, Judge In Tax Protester Case Pushed IRS To Investigate Promoter, IRS Forms 1099 Good, Bad & Ugly For Your Taxes. Our mission has never been more vital than it is in this moment: to empower you through understanding. 12. I’ve devoted most of my professional career to making complex legal and tax concepts understandable to people who do not enjoy reading the Internal Revenue Code or the US securities laws. Yes, the benefits are considered taxable income, including the FPUC payments. 4. Self-employed workers out of a job right now can begin filing for pandemic unemployment assistance in Illinois on Monday ... "It's been pretty frustrating and confusing at the same time… The CARES Act expanded unemployment benefits to the self-employed, independent contractors, gig workers and others who’d been ineligible for … But many are still waiting to apply for those benefits. She’s the firm’s authority on Massachusetts unemployment insurance, general unemployment mechanics used in various states, and the federal program. Please consider making a contribution to Vox today. While self-employed workers and anyone who gets paid … You may qualify for PUA benefits until the PPP funds are received, and again after the PPP funds are depleted—but individuals should not apply for benefits for the period when they are relying upon PPP funds. If, for example, you met the earned wage threshold for the state’s designated base period, you would receive benefits under the regular unemployment program, rather than the PUA. But it has been a challenge for states to get this money out the door. Pros and Cons . Other states, including Ohio, are already looking at a May timeline before they can get their PUA programs ready to accept applications, and others haven’t released timelines. Individuals will not be able to proceed with claiming weekly benefits for the most … You have been unemployed for a long time and are unlikely to get another job in the same or similar occupation. But you need to understand the rules. Is it possible to be on, off, and then back on unemployment? not doing business as an individual through a separate legal entity like an S Corp). A lot of people have asked me whether a self-employed person or independent contractor can get both an EIDL or PPP loan and unemployment insurance. The reason for your change in employment. A5: Yes, you may be eligible for benefits, but part-time employment during the week claimed will reduce The best way to find out how to apply for your state’s PUA program — what the status of it is — by visiting your state’s unemployment website. What are the rules to follow for that? Like … These may qualify. For current state-declared disasters, visit EDD Disaster-Related Services. I’ve been laid off from my job, but I still have a second/self-employed job; am I eligible for unemployment? Thanks to the CARES Act, self-employed people out of work now can, for the first time, collect unemployment benefits when their income has been affected by the COVID-19 pandemic. You can continue to work while collecting Pandemic Unemployment Assistance (PUA) benefits. Self-employed, part-time workers can receive unemployment benefits April 8, 2020 April 6, 2020 Staff U.S. Your eligibility for PUA would hinge on whether you are eligible for regular unemployment compensation through your state’s unemployment program. independent contractors, gig economy workers, and workers for certain religious entities individuals lacking sufficient work history, and those who otherwise do not qualify for regular unemployment compensation or extended benefits. You can't double-dip if you're self-employed. Ask Larry: Will Social Security Automatically Start My Wife's Spousal Benefits When I File? “We want to make sure that we have covered unemployment insurance with sufficient resources,” House Majority Leader Steny Hoyer told Vox on Tuesday. With 22 million people applying for unemployment benefits over the last month, there’s already consensus in Congress that another relief bill is needed, with more money for unemployment programs. The CARES Act created a Pandemic Unemployment Assistance program for individuals that are self-employed, contract workers, those ineligible for state unemployment benefits or have exhausted benefits. For example, in Massachusetts if you made over $5,100 during the last 4 completed calendar quarters through W-2 work, you would qualify for regular unemployment benefits. You were self-employed and are unemployed due to general economic conditions or a … 5. However, self-employed individuals, regardless of whether doing business an S Corp or LLC, may be eligible for PUA benefits if they can show a significant loss of income tied to COVID-19. May I not do any revenue-generating work when collecting UEI? 10. In myStockOptions.com, I created the premier online resource of educational content and tools on stock compensation (stock options, restricted stock, and employee stock purchase plans) for plan participants, financial advisors, and companies. Washington, Massachusetts, Georgia, and Alabama are among the states already accepting PUA applications, but many other states haven’t yet announced the dates for when they’ll have their program set up and ready for workers to file. The DOL clarified on April 27 that gig workers will still be eligible for benefits under the PUA even if they are not totally unemployed. Individuals covered under PUA include the self-employed (e.g. © 2021 Forbes Media LLC. Yes, but individuals using more than one program are urged to be careful with the timing. “You could be looking at a $5,000 check all at once,” Stettner told Vox. Individuals must choose their reason for unemployment from a list of reasons from the CARES Act. Each state is running on its own timeline rather than a set one by the federal government. Self-employed individuals may not be eligible for unemployment insurance, but may be ... also filed for unemployment benefits for those same weeks, you will need to notify the Except for federal unemployment benefits, both self-employed individuals and employees pay the same taxes: federal income taxes and taxes for Social Security and Medicare. Her explanations covered what the Pandemic Unemployment Assistance (PUA) program is, who is eligible, how to qualify for benefits, how much will you get, and how you apply. AUSTIN ⎯ The Texas Workforce Commission (TWC) advises self-employed, contract and gig workers who have lost work due to the COVID-19 pandemic to apply for Pandemic Unemployment Assistance (PUA) using Unemployment Benefits … Finally, states have to program the computers in their unemployment systems with the new information — and some states rely on mainframes and programming that haven’t been updated since the 1970s. As explained on the IRS website, unemployment compensation you receive will be reported on Form 1099-G, which shows the amount paid to use for tax return reporting. IRS Agent Stole Identity, Forged Papers, Wire Fraud, Feds Claim, As Federal Aid Stalled, State And Local Governments Issued Bonds To Pay Current Bills, Why The U.S. Senate Parliamentarian Could Become A Household Name In 2021. Many independent contractors and gig workers may meet this threshold but receive the rest of their income from contract work. As this is an entirely new development, state unemployment systems are overwhelmed and the rules remain unclear. You may qualify for benefits until the PPP funds are received, and again after the PPP funds are depleted—but individuals should not apply for PUA benefits for the period when they are relying upon PPP funds. You will be required to disclose all income you receive, which will be calculated against your benefits amount for that week. Unless new legislation is passed, unemployment insurance for self-employed individuals will expire on December 31, 2020. A self-employed hairdresser will be eligible if you have income that is reported on either a form 1099-MISC or a Schedule C as part of your 2019 tax return. If you meet the eligibility requirements for regular unemployment, you would not be eligible for the PUA. While there are many positives to being self-employed such as choosing your own hours (full or part-time), shortening or completely avoiding your commute, focusing on career objectives that matter most to you, being able to work remotely and tax deductions, one of the downfalls is that benefits usually included in salaried work must be paid for out-of-pocket. If my hours are reduced but I am still employed, can I apply? Pandemic Emergency Unemployment Compensation. The Pandemic Unemployment Assistance (PUA) expanded who is eligible for unemployment insurance benefits. Owners of an S Corp and an LLC are generally considered self-employed, no matter the size of the business. You are self-employed, are seeking part-time employment, do not have sufficient work history, or otherwise would not qualify for regular unemployment or extended benefits under State or Federal law or pandemic emergency unemployment compensation under section 2107 and you meet the requirements above. Your income can fluctuate between weeks, as most state programs will require you to apply each week and report any income received that week. The federal government recently appointed a new special inspector general tasked with the supervision and coordination of audits and investigations related to CARES Act aid. Some ideas Congressional Democrats are discussing include either extending the extra $600 a week in federal aid or adding more weeks before an individual would be kicked off regular UI benefits (without the extra $600 per week), a senior Democratic aide recently told Vox. This article offers more of her insights. Most of my income comes from work as independent contractor, although I do some work where I’m paid as an employee and get a W-2. With the 3 options for the self-employed or sole proprietorships (UEI, PPP, EIDL), it seems inevitable that if you use all of them you’ll be audited by the federal government in 2021. Self-Employed, Other Newly Eligible Workers Can Apply for Unemployment on Monday, $600 Federal Payments Also Begin LANSING, MICH. – Michigan’s self-employed workers, gig workers, 1099-independent contractors and low-wage workers affected by COVID-19 can apply for federal Pandemic Unemployment Assistance (PUA) beginning Monday, April 13 at 8AM. Individuals who have been “self-employed” for only the last 18 months and pay taxes on that income (i.e., you have not earned any wages as a W-2 employee). Filing the claim and getting that monetary determination is … However, the state will require that you disclose all partial income received, like that from W-2 work, which may impact the amount of benefits received. Under the $2 trillion Coronavirus Aid, Relief, and Economic Security, or CARES, Act, self-employed workers now qualify for $600 in weekly Pandemic Unemployment Assistance (PUA) … My prior article asked the most common questions and presented answers from a lawyer deeply involved with this legal specialty: Amanda Thibodeau, an attorney at Morse, a law firm in the Boston area. Beware Legal Risks Of Paycheck Protection Loan Program Until More Guidance Issued, SBA Says Paycheck Protection Program Loans Are Not For Larger ‘Small’ Businesses With Liquidity Access, I’ve devoted most of my professional career to making complex legal and tax concepts understandable to people who do not enjoy reading the Internal Revenue Code or the US. It is against Federal Law to file for and receive benefits for Unemployment Insurance (including Pandemic Emergency Unemployment Compensation (PEUC) and State Extended Benefits (SEB)) at the same time as Pandemic Unemployment Assistance (PUA). How to apply for unemployment benefits if you're self-employed. Connect with friends faster than ever with the new Facebook app. NOTE: If you work for religious organization that has voluntarily elected to pay unemployment, you must file a regular unemployment claim. Keeping documentation about your previous income and wages as a freelancer, independent contractor, or self-employed worker is important and will help you when filing for unemployment. not have wages to set up an unemployment insurance claim, then you may be eligible for Pandemic Unemployment Assistance (PUA). Millions of workers who self-employed, freelancers, or independent contractors are qualified for a new unemployment program, set up under … In most states that amount will be offset from your eligible weekly benefit amount, and you would receive partial PUA benefits for that week. Typically, most self-employed individuals and independent contractors working in Tennessee are not authorized to obtain regular Tennessee Unemployment Compensation (TUC). Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article. Pandemic Unemployment Assistance (PUA) provides unemployment benefits to workers who were not traditionally eligible for benefits, including self-employed people. You will run into issues if you are receiving PUA benefits during the period covered by the PPP. attorney at Morse, a law firm in the Boston area. I make the law and the tax code understandable to everyone. Your financial contribution will not constitute a donation, but it will enable our staff to continue to offer free articles, videos, and podcasts at the quality and volume that this moment requires. Each state’s program lays out what types of work search activities must be reported each week, such as responding to job postings or sending out résumés. Now What? 8. PUA was created through the federal CARES Act and provides up to 39 weeks of benefits through December 26, 2020. Millions of workers who self-employed, freelancers, or independent contractors are qualified for a new unemployment program, set up under the recently passed CARES Act. In which state do I apply for UEI? Given the unique situations gig workers and freelancers are involved in, it is likely the states will continue to be flexible on their work search requirements. Federal and Military Documents. Are the UEI benefits taxable by the IRS or by states that have income tax? Is this true? office rent), you may be eligible for unemployment benefits. 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