S-corp IL Unemployment

roger · #1 (**permalink**) 10-28-2009, 12:11 AM

Hello TaxGuru,
I have s-corp for about 3 years. I have taken salary in 2008. Me and my wife are parters. I have about 2-3 w2 employees. I have also taken dividends from my company. Recently I billed at client and my contract got over. But my employees still generated revenue for me. As my contract was over, I thought I can claim unemployment. In fact, I did take unemployment. Is it ok to do this?

PLEASE HELP!! IT'S VERY URGENT!!

Thanks in advance.

roger · #2 (**permalink**) 10-28-2009, 10:06 AM

Can Taxguru or members can answer this? Am I not posting this correctly?

Thanks

TaxGuru · #3 (**permalink**) 10-28-2009, 10:38 AM

I would hazard a guess that as long as your contract has been terminated, and you have no other sources of earned income, then depending on your State's requirements I would think that you may be able to claim unemployment in IL.

Additionally, you should terminate your S Corporation and take a distribution of all retained earnings out as there is no activity in the S Corporation.

I would still consult your Local unemployment Office just to be 100% certain that you are in the legal bounds.