Entrepreneur Life

March 25, 2020

Collecting Unemployment And The Stimulus Relief Package When You’re Self-Employed

Updated: March 30, 2020


Unemployment Benefits for Self-Employed Workers

Can you collect unemployment if you are working as a freelancer, independent contractor, or self-employed individual running your own business?

The answer is NOW yes!

Pre Covid-19, self-employed workers, independent contractors, and freelance workers who lose their income are not eligible for unemployment benefits. However, the federal government is expanding benefits to cover self-employed individuals and gig workers. Legislation has been approved, information on how to qualify and collect benefits are available below. [1]

If you are unemployed, laid off, or a freelancer (sole-proprietor or single-member LLC) out of work, here’s what’s new:

Eligibility for unemployment insurance extended for all workers, not just full-time employees.
The federal government will provide an extra $600 per week for up to 4 months on top of your state’s current state unemployment benefits.
State unemployment benefits range from $200 to $550 per week on average and collected between 12 and 28 weeks.

For more information about filing for self employed unemployment benefits, check this unemployment benefits finder. 👇🏻

https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/Find-Unemployment-Benefits.aspx

Unemployment Benefits

The federal and state governments are expanding sick leave and unemployment benefits and working on legislation to help impacted independent workers.

The stimulus bill, which is expected to pass this week, will include as of now expanded unemployment benefits. Senator Chuck Schumer says, “The extended UI program in this agreement increases the maximum unemployment benefit by $600 per week and ensures that laid-off workers, on average, will receive their full pay for four months. It ensures that all workers are protected whether they work for businesses small, medium or large, along with self-employed and workers in the gig economy.” Legislation that provides expanded unemployment compensation to self-employed and workers in the gig economy is being finalized by the Senate.
Important To Note: Here’s information on COVID-19 unemployment and sick leave benefits for employees and self-employed independent workers and gig workers.

Standard Unemployment Benefits for Self-Employed Workers

The EDD provides services to people and businesses affected by disasters in California.

If you lost your job or cannot work because of a disaster or emergency, you may be eligible for Unemployment Insurance (UI), Disability Insurance (DI), or Paid Family Leave (PFL) benefits.

It’s been authorized by the President of the United States, Disaster Unemployment Assistance (DUA) is available for workers and self-employed people who do not qualify for regular UI benefits. [3]

For current state-declared disasters, visit EDD Disaster-Related Services.

Check Your Eligibility

Eligibility varies from state to state, so if you’re not sure whether you’re eligible, check with your state unemployment office to find information about who can collect unemployment compensation, and how to go about filing a claim. When you become unemployed, it’s a good idea to check if you may be eligible for benefits right away. It can take time to begin receiving benefits if you do qualify, so you should file your claim as soon as possible.

Coronavirus Stimulus Package Relief

If you are a small business owner, here’s what’s new:

• Emergency grants of up to $10,000
• Short-term forgiveness on new loans of up to $10 million
• A payroll tax credit to help retain employees

Apply here 👇🏻
https://covid19relief.sba.gov/#/

Self-Employment Assistance Program

The Self-Employment Assistance Program is a federal government-endorsed program which offers unemployed or displaced workers in some states unemployment benefits when they are starting a business. The Self-Employment Assistance program pays a displaced worker an allowance, instead of regular unemployment insurance benefits, to help keep them afloat while they are establishing a business and becoming self-employed. [2]

Tax Credits

The Families First Coronavirus Response Act provides a refundable tax credit for eligible self-employed individuals who must self-quarantine, obtain a diagnosis, or comply with a self-isolation recommendation for coronavirus.

 

Article Sources

  1. Capital News Forum. “Senate Cuts Coronavirus Rescue Deal; Schumer’s Explanation.” Accessed March 25, 2020.
  2. U.S. Department of Labor. “Self Employment Assistance.” Accessed March 23, 2020.
  3. EDD California. “Disaster Unemployment Assistance”.

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