Whether you own a business with a day job or work full time for yourself, your side job can be both a blessing and a curse. If you are one of the millions of Americans who have lost their jobs due to the coronavirus crisis, you can apply for unemployment insurance.
However, if you have a side business or are self-employed, your unemployment benefits may not be as high as other types of workers. This is what to expect if you own your own small business and want to collect unemployment.
Unemployment benefit basics
Unemployment benefit is a form of unemployment insurance that provides temporary financial assistance in case you lose your job due to your fault. This is a joint state and federal government program to give Americans job-free money.
Each state has its own rules and requirements for unemployment benefits, including how long you are unemployed, how much money you receive, and the conditions under which you lose your job.
For example, if you were fired for poor performance, you are not entitled to unemployment benefits.
Can you accumulate unemployment if you have a side business?
Most regular unemployment insurance regulations do not allow independent contractors and self-employed workers to receive unemployment benefits.
The CARE Act, which expires at the end of 2020, provides waivers for freelancers, independent contractors, self-employed and non-eligible small business owners.
In 2020, Congress passed two laws extending the duration of unemployment benefits for self-employed individuals, including those with additional businesses.
Unemployment during the coronavirus pandemic
The Continuing Unemployment Benefits Act extends the Pandemic Unemployment Assistance (PUA) Fund under the Care Act to March 14, 2021. As of March 16, the United States Rescue Plans Act renewed unemployment benefits to September 6, 2021.
PUA funding is provided by the unemployed authorities in each country. Employees who qualify for the PUA can receive additional program benefits of $ 300 per week.
Under the Mixed Profit Unemployment Compensation Program, workers who qualify for other types of unemployment benefits and who have earned $ 5,000 in one year as self-employed can continue to receive benefits of $ 100 per week in addition to regular unemployment benefits.
Since the start of the pandemic, employees with secondary jobs or self-employment, freelancers, or independent contractors can take out unemployment insurance for up to 86 weeks through the PUA.
How do I apply for unemployment benefits?
To get unemployment benefits during a pandemic, apply in person, by phone, or online through the employment office in the country where you work if you have a side business.
Although the application process varies depending on the conditions, there are some basic steps to follow:
- Locate your state’s unemployment office. The U.S. Department of Labor offers this helpful unemployment benefits locator map.
- Prepare your personal information. You’ll need to have details like your address, phone number, and Social Security number, as well as bank information if you’d like to receive your benefits through direct deposit.
- Gather your income information. You might be asked for financial information, like your total income for the year. If your unemployment office requests additional documentation, you should have 1099s, your annual tax return, or other proof of income on hand.
If you qualify for the PUA, you will need to recertify your unemployment status regularly. The interval may vary depending on the state in which you work.
Workers who own a small business but do not benefit from the PUA can appeal the unemployment agency decision. Each state has its own formal complaints procedure, such as an on-demand complaint form or an address to which a written letter must be sent to accompany the text.
There are also deadlines for filing an appeal against a decision on unemployment benefits. For example, a California complaint form must be submitted within 30 days of the decision date. Make sure you submit your complaint within the deadline set by your country.
Frequently asked questions about collecting unemployment with subsidiary businesses
What financial assistance is available for workers with background noise?
Under normal circumstances, people with side businesses are not entitled to unemployment benefits. CARE’s Act – and now the newest American Rescue Plan Act – have expanded the coverage of non-traditional workers, including freelancers, independent contractors, small business owners, and other types of self-employed.
Even if you only do a side business a fraction of the time, you are entitled to compensation if you lose your job.
How do I know if I qualify for unemployment benefits?
The Pandemic Unemployment Assistance (PUA) was created to help workers who do not qualify for unemployment insurance as self-employed and freelancers.
Conversely, if you do not qualify for regular unemployment insurance, you can qualify for PUA benefits.
If you can prove that you lost your job because of the COVID-19 crisis or had to stop working to care for a family member, you may be eligible for benefits.
If you feel you qualify, you will need to apply in the country where you last worked.
How long will I receive benefits?
The number of weeks you can receive unemployment benefits varies from state to state, despite U.S. bailout laws extending its duration to 29 weeks in most states. PUA benefits are limited to 86 weeks ending September 6, 2021.
How much money do I get for unemployment?
How much money you make from unemployment benefits depends on where you work and how much money you make based on your latest tax returns and payments. You will receive at least the minimum amount of unemployment in your country.