Can self-employed file for unemployment?
Until recently, people who identified themselves as self-employed couldn't collect unemployment benefits. After the COVID-19 pandemic, the CARES Act was passed by Congress to respond to the pandemic and ease its negative impacts on the economy. Currently, self-employed people can now receive unemployment benefits if they can prove that their income has been affected by the crisis. So what are the qualifications to apply for unemployment benefits? These and other questions abound among self-employed people now seeking crisis relief. First of all, we should define who can be considered as a self-employed worker. Let’s learn more about if you are eligible for unemployment for self-employed.
The IRS defines self-employed professionals as follows:
If you carry on a trade or business as an independent contractor or a sole proprietor (With the extended CARES Act, freelancers and sole proprietors can apply for independent contractor unemployment benefits)
If you are a member of a partnership of a trade or business
If you are doing a business for yourself, including a part-time business
The million-dollar question, can I collect unemployment if I work as a freelancer, independent professional, gig worker? Can self-employed file for unemployment?
Traditionally, self-employed workers weren't eligible for unemployment benefits; however, the federal government has expanded unemployment benefits to cover self-employed and gig workers. Right now, you are eligible for unemployment benefits if you are one of the following:
Small business owner
Check your eligibility
The CARES Act gives states the option of extending unemployment compensation to independent contractors and self-employed workers who are ordinarily not eligible to collect unemployment benefits.
If you are wondering about your eligibility, please contact your state's unemployment insurance office. Here you can find a complete contact list of unemployment insurance offices state by state.
Types of unemployment benefits for self-employed
Unemployment benefits are now available to Americans who have lost work because of the COVID-19 crisis—including independent professionals, contractors, and other self-employed workers. If you will apply for unemployment for the self-employed, get more information about the CARES Act.
The Paycheck Protection Program is a loan planned to provide an immediate incentive for small businesses to retain their payroll workers. If you need more information or have questions about your eligibility, you can learn more about the Paycheck Protection Program here.
Freelancers Union operates Freelancers Relief Fund, and it is assisting up to $1,000 per household to those who are qualified unemployment for freelancers to cover lost income and essential expenses.
FEMA's Disaster Unemployment Assistance program provides unemployment benefits to individuals who have become unemployed due to an incident or a major disaster. Check the requirements to see if you are eligible for assistance.
With the Self-Employment Assistance Program (SEAP) help, you can now apply for the Unemployment Insurance benefits to pay your utilities and bills while you work on your dream. Check out the requirements.
How to apply for unemployment if you are self-employed
Step 1 – Prepare your documents
Here you can find a detailed list to prepare before for unemployment benefits due to COVID-19. Make sure you get your documents ready before starting the application process.
-Proof of Citizenship
-Employment history from the last 18 months
The name of the company
Total gross wages. If you are self-employed, your net income (total after taxes).
The reason you are no longer working
-Information from your last employer or company
Mail address and phone number
Net income (total after taxes)
The reason for your change in employment
-Federal and Military Documents
Step 2 – File a claim for unemployment
In each state, the unemployment benefits application online platform is different. You can see the list of the state's websites here. The easiest and fastest way to make your application for unemployment benefits is using online platforms. You can also try to apply by phone, mail, or fax.
After you find out which website to use for your application, you can apply for your unemployment benefits just as you would apply for regular UI benefits.
Step 3 – Benefit Payments
It may take about a week after your application to receive your first unemployment benefit payment. If you prefer to receive benefits on an EDD Debit card, Bank of America will mail you a card once payments are available.