Its time for many of us to File for Unemployment !!
This Blog is for the self-employed, small business owners and 1099 contract workers
How Much Can I Get? $2,800/mo !! Under the Stimulus Bill, Freelancers, gig workers, self-employed, can receive half the average unemployment benefit in their state plus an extra $600 per week. How much is the average ? Well, if you didn’t already know, unemployment benefits are ‘kindofa joke’, the average per week is about $150. However with this federal subsidy of $600 per week now we’re talking !! So, you can hope for $700/week or about $2,800 per month. The Bill provides for these benefits for up to 4 months.
Example: A Real Estate Agent, gig worker, Attorney or Mechanic doing business through their own LLC and has no employees. Really any self-employed individual doing business as an LLC or a sole proprietor who receives 1099 income. .
Option 1: Applying for the Forgivable Small Business Loan. Well, the amount you can borrow is based on your payroll for the previous 12 months as I discussed in my Blog #2. Under this calculation these entities have zero, or very little payroll (if they have paid themselves as a W-2 employee). So getting one of these forgivable loans isn’t an option or the amount is so small it isn’t worth the effort. Therefore, the only option available is applying for unemployment. Yes, for the first time in history, self-employed individuals with little or no W-2 history can receive unemployment benefits.
To get your money flowing. Apply at your state’s unemployment office. Most states are taking applications online. I assisted a client yesterday with her claim. She was able to complete her unemployment claim entirely on her smartphone in less than 15 minutes.
Unemployment on Steroids ?? That’s what they’re telling us. Yes, we’ve never seen such broad coverage and such a large amount being paid out, $2,800/mo !!
Monty’s Note : I am most concerned about this portion of the Bill, none of the 50 state’s unemployment offices have the systems or personnel to administer this many claims or this amount of Federal money being given to them. They have never before provided benefits to this sector of our workforce (gig/self-employed). This sector of our economy desperately needs this assistance, right now! I foresee the Fed’s will have to instead use the IRS or the SSA to deliver these benefits. The IRS / SSA already have the systems in place, personnel and the information on these gig/freelancers (as long as they have filed their 2018 and/or 2019 income tax returns). Prepare yourself for the worst case scenario here. If you apply for unemployment today, March 30th, in my opinion you will not see your first electronic deposit into your checking account until May 1st at best. I hope I am wrong here.
What’s a gig worker ? Best example is a musician who often refers to performances as ‘gigs'. The definition has expanded greatly to include many self-employed / 1099 contract workers including Uber/Lyft drivers, web-designers working from home for numerous companies, hair stylists, personal trainers, etc. Really anyone who reports their income on Sch C of their Form 1040 and/or single member LLC’s who report their income on Sch C, Form 1120S or Form 1120. Gig entities have no W-2 employees, they may have 1099 independent subcontractors.
Who should file for unemployment In addition to gig / freelancer’s mentioned above if you are a traditional employee and you’ve been laid off, furloughed, told not to come to work because of the detection of Covid-19 in your workplace. Individuals who were scheduled to start a job and could not because their future workplaces had been shut down due to the COVID-19 pandemic, would also be eligible. Additionally, individuals whose head of household died directly due to COVID-19 will be eligible.
The 7-day waiting period before an unemployed worker can get benefits, which is a standard feature of most states’ unemployment systems, is being waived to help individuals receive cash as quickly as possible.
Employers: Not to worry, your unemployment rate will not adjust upward during this time for employees who file for unemployment.
Stimulus Checks I discussed these checks in detail in Blog #1 a couple days ago. One group who WILL NOT receive stimulus checks in April….Those with ITINs instead of Social Security Numbers. The Bill left out this group entirely.