How You Can Get Unemployment If You’re Self Employed

Here’s how you can get Unemployment Benefits if you’re self-employed – and a breakdown of who is eligible, how much money these benefits will be, and how can you apply.

Are the Self-Employed Able to Get Unemployment?

Yes, the United States government extended unemployment benefits to the self-employed on March 27, 2020.  This includes artists, musicians, hairdressers, landscapers, Uber drivers, etc.  In fact, nearly 45 million Americans may now be eligible for unemployment benefits during these difficult economic times.

The new laws signed by the United States government provide three main benefits:

  1. Unemployment insurance to those who have been traditionally ineligible—Pandemic Unemployment Assistance (PUA)
  2. An additional $600 per week on top of regular unemployment benefits—Federal Pandemic Unemployment Compensation (FPUC)
  3. An additional 13 weeks of benefits beyond what’s provided by your state—Pandemic Emergency Unemployment Compensation (PEUC)

Who is Eligible for Self Employed Unemployment Benefits?

These benefits are available if you’re completely unemployed, partially employed, or unable/unavailable to work because of the health crisis.

Essentially, eligibility comes down to if you’re out of work or not.  For example, if the shop where you cut hair is closed, then you are eligible.  If they canceled your performances, events, or projects, then you are eligible.  Basically, if you’re stuck at home and cannot earn money because everything’s shut down, then you are eligible. 

However, if you are working and still earning most or all your income, even if it’s remotely from home, then you are not eligible. 

How Much Money Will These Benefits Pay?

Exact amounts of money paid vary by state.  This means that even though the federal government is passing these new laws, it is still up to the state where you worked to facilitate your unemployment application and distribute your money to you.

I’ll give you an example, here in New York, the maximum weekly unemployment benefit amount is $504, but in Florida the maximum weekly benefit is $275. 

I’ll include a link at the end of this post for maximum weekly unemployment benefits by state.

What About the Additional $600 Per Week Unemployment Benefits? 

The amount available because of these new laws is an additional $600 per week on top of regular unemployment benefits provided by your state.  It’s $600 per week, plus whatever your state pays—combined.  The timeline for these additional payments is April 5, 2020 – July 31, 2020.

How Can You Apply for These Unemployment Benefits?

Applying for these benefits can be problematic to say it nicely.  State unemployment offices are understaffed for this massive wave of people applying for benefits.  Many of their online and phone systems are not integrated yet with these new laws.

Can you apply for unemployment if you’re self employed?  The answer is yes – but be prepared for a long and confounding application process.  We’re talking jammed phone lines, websites not loading, and you can’t get through to a real person.

What I can offer you is some guidance filling out the online forms and the documentation you’re going to need when applying.

Quick disclaimer – each state application is a little different, but this information should help if you’re self employed.  Also, some states have updated their sites more than others.  If you see a section specifically for self employed, then count yourself lucky.

Help with the Unemployment Application If You’re Self Employed

First, when you get to a part of an application that asks “how many employers have you worked for in the past 18 months” simply select one employer.  If you were only self employed and had no other employment, remember that you are your own employer because you’re self employed. 

Next, if you’re self employed and don’t earn income another way then answer “no” when it asks a question like “other than part time work, on-call work or owning a single family rental unit are you engaged in any activity which brings in income.”  

Keep in mind that your main source of income is being self employed, and you are shut down right now.  Even if you are working part-time somewhere else, you can still apply and may earn partial unemployment benefits.

You can leave blank sections of the application that ask for the Federal Employer Identification Number, the EFIN, or the State Employer Registration Number – just leave these parts blank.

Also, if there’s a section where they ask for your most recent employer’s name, address, telephone number, then put “Self Employed” for the employer’s name and either your business or residential address and phone number.

I understand that these steps may feel strange while filling out the application, but they should help your state recognize that your application is for a self employed person, and that should help you get your money as quickly as possible. 

Now, if you have to call into your state’s unemployment office, take a deep breath here.  Be prepared for a marathon, not a sprint.  In terms of the best time to call … there isn’t one right now, and I am sorry.

What Documentation Do I Need When Applying for Self Employed Unemployment Benefits?

I recommend gathering everything you need to file your claim before going online or calling.  You’re going to need the following:

  • social security number
  • driver’s license number
  • bank account number and routing number for direct deposit
  • you may need to create an online account with your state to file online so be prepared to select… 
    • a password
    • security questions
    • verify your email

A final thing to keep in mind is that the federal government is encouraging states to relax the usual requirement of waiting a week before getting paid.  Also, you usually must prove that you’re actively looking for employment, which is being relaxed by most states as well. 

Anything Else I Need to Know Before Applying for Self Employed Unemployment?

You will need to check-in each week online to let the state know you’re still not employed.  Some states are only requiring bi-weekly certification, but it’s that routine check-in that generates the payments to you. 

Your benefits are retroactive to the date you stopped working.  If you are having a terrible time applying, rest assured that once you finally get through, everyone who is entitled will get their benefits. 

One wrinkle I wanted to bring up in case this happens to you, the new benefits we discussed come from the new laws.  Strangely, some states are saying you must apply for and be determined ineligible for regular unemployment benefits in order to apply for the new benefits.

I can’t believe you really have to apply and get denied just to get the opportunity to apply again for the new benefits.  However, be prepared for some sort of second application for the new benefits that are coming from the new federal laws.  This isn’t the case with all states, but if you’re initially deemed ineligible just a heads up.

Also, it is unclear if the additional $600 will be in the same check with regular benefits.  It might end up being combined or separate payments, but eventually you will get both the amounts generated by the state and the additional $600 per week. 

By the way, there are two other major benefits available for self employed people and small business owners that we have not discussed.  These are completely separate from unemployment benefits, but could be very valuable to a lot of people.  I’m talking about two separate loans—the EIDL and the PPP.  I don’t want to confuse anyone here, but I have posts and videos about those two other programs.

Okay, let’s recap.  Self employed Americans who were not traditionally eligible for unemployment benefits may now apply and get paid from the state where you work.  This includes independent contractors, sole proprietors, and gig workers. 

These benefits are temporary and will last in some form until December 31, 2020.  Of course, unless an extension is signed into law.  

During these difficult economic times, those eligible will get an additional $600 per week from April 5, 2020 to July 31, 2020, on top of the regular state provided unemployment benefits.  States can also apply for an additional $300 retroactive from August 1, 2020 which should last approximately six additional weeks.

Unemployment benefits can be extended an additional 13 weeks beyond what’s already provided by your state.  You should file your application online but be prepared for a lengthy process without the ability to talk with a real person.  It’s a very good idea to gather all the necessary documentation you need before you apply.

Typically, it takes a few weeks for your money to be deposited. Some states are issuing debit cards rather than doing direct deposit.  Either way, don’t expect the funds right away. 

You’ll need to check-in weekly to maintain your benefits.  This money is considered taxable income, so it’s a good idea to check the boxes to withhold federal and state tax.

This legislation is new.  We don’t know all the rules yet.  Please help each other down in the comments because some of you going through this know a little bit more than somebody else.

Here’s the link for maximum weekly unemployment benefits by state, and it includes direct links to each state’s unemployment website:  Saving to Invest

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As always, I’m Rich and until next time.

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