Self-Employed Jobless Aid: Essential Information
Self-Employed Workers Can Now Qualify for Unemployment Benefits Under the CARES Act
In a significant shift, self-employed workers, including independent contractors, sole proprietors, and gig workers, can now qualify for unemployment benefits. This change comes as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law by President Trump on December 27, 2020.
The relief package includes an extension of pandemic unemployment benefits for self-employed workers, contractors, and gig workers. To file for unemployment benefits as a self-employed worker under the CARES Act, you should apply through your state's unemployment insurance program, using the Pandemic Unemployment Assistance (PUA) provision. PUA was created under the CARES Act to provide benefits to those not normally eligible for regular unemployment insurance, including self-employed individuals, freelancers, and gig workers.
Key steps generally include:
- Check your state's unemployment office website to find the PUA application portal or process.
- Provide documentation of self-employment income, such as tax returns, 1099 forms, or invoices, to establish your eligibility.
- File a claim online or by phone, following your state's instructions for PUA claims.
- Certify weekly or biweekly for continued benefits as required by your state.
It's essential to note that eligibility and guidelines for unemployment benefits vary by state. Some states are experiencing delays in processing new unemployment claims due to the launch of new application systems and a surge in claims. To learn about who can collect benefits, how to file a claim, and if any delays are expected, contact your state's unemployment insurance office.
Under normal circumstances, businesses structured as sole proprietorships aren't able to collect unemployment benefits because unemployment taxes aren't paid if there are no employees. However, self-employed workers, including those operating as an S corporation, might also qualify for unemployment benefits. To be eligible, you must treat yourself as an employee and receive a paycheck that deducts federal and state taxes, including unemployment taxes.
The CARES Act expanded unemployment benefits to cover these groups who traditionally do not qualify for regular state unemployment insurance. PUA benefits were extended and enhanced through subsequent legislation, but the original CARES provisions ended in 2021. Programs and amounts might differ or have ended by 2025, so verify current state rules.
In summary, self-employed individuals filed under the CARES Act by applying through PUA programs managed by their states, using self-employment income verification. Those provisions were pandemic-era benefits and are likely closed now; current assistance would depend on state or new federal programs.
- Self-employed workers can avail unemployment benefits through the Pandemic Unemployment Assistance (PUA) provision, which was created under the CARES Act.
- To qualify for unemployment benefits as a self-employed individual under the CARES Act, one might need to demonstrate self-employment income using tax returns, 1099 forms, or invoices.
- In general news, personal-finance discussions may include the impact of the CARES Act on the insurance coverage for self-employed workers in terms of unemployment benefits.
- Businesses structured as sole proprietorships typically do not pay unemployment taxes, but self-employed workers might still qualify for benefits if they treat themselves as employees and receive a paycheck with federal and state taxes, including unemployment taxes deducted.
