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Old 01-25-2013, 05:02 PM
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Is is possible to get unemployment if you are an LLC

Earlier this year I was laid off from my job of 20 years then brought back on contract. I started an LLC so I could contract with them. I think the project will soon be getting cancelled. Is there any way to get unemployment for awhile until I find another job? I didn't think it was possible with an LLC. Can I convert my LLC to an S-Corp and backpay the unemployment taxes so I can get the benefit when my project is cancelled?



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Old 01-25-2013, 07:31 PM
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“ Is there any way to get unemployment for awhile until I find another job? “===>Unemployment benefits are provided by state unemployment insurance programs within guidelines established by Federal law. In order to receive unemployment compensation, you must meet the unemployment eligibility requirements for wages earned or time worked during an established (one year) period of time. In addition, you must be determined to be unemployed through no fault of your own. You may be able to file for unemployment online or over the phone. Review the information you will need to open a claim. Then, visit your state unemployment office to determine the best way to open a claim and to get started collecting unemployment.
“I didn't think it was possible with an LLC. “=====>If you are currently out of work due to no fault of your own, check with your state unemployment office to see if you are eligible for unemployment benefits. Even if you were considered self-employed, I mean SMLL owner, when you last worked, you may be eligible.So,you need to Talk to your state unemployment office. Each state also has the ability to set specific unemployment eligibility guidelines and requirements. Self-employed people are not eligible for traditional unemployment benefits because unemployment is an employer-funded program, but there are a few related programs that offer assistance to current and future self-employed people. While self-employed people are not eligible for unemployment collection, former EEs who are eligible for unemployment can become self-employed through Self-Employment Assistance. DE, M, Maryland, NJ, NYS, OR. and PA all offer variations of this voluntary program that lets an unemployed person start a small business as an alternative to job-hunting while collecting their unemployment insurance. A few additional regulations do apply to these programs. In WA state you must prove eligible for regular unemployment benefits, receive an eligibility letter stating that your unemployment benefits would likely run out before a new job was found and enroll in an approved training program.



“Can I convert my LLC to an S-Corp and backpay the unemployment taxes so I can get the benefit when my project is cancelled?”====>I guess it depends; as long as you , as an S corp owner pays unemployment taxes to the IRS/yur state; however, state law also determines eligibility for unemployment benefits;depending upon the corporate structure, state laws and the circumstances surrounding a business closure, a business owner may be entitled to receive unemployment benefits. Some owners of an S corp are eligible to receive unemployment benefits, although only if they meet requirements. The IRS allows S corp owners who are materially involved taking a hands-on role in daily business to pay themselves reasonable salary as any other EE. These wages are subject to all state and federal payroll taxes, including unemployment taxes. S corp owners who only took profit distributions, and didn’t receive wages, haven’t contributed to unemployment taxes, so they aren’t eligible for unemployment insurance. Some states offer benefits to corporate officers who receive wages that are subject to federal unemployment taxes, while some refuse benefits to owners who own more than 50 percent of the company’s stock. Additionally, many states don’t allow S corp owners to collect unemployment insurance benefits if they sold or leased the business against which they’re making unemployment claims.I gue you need to contact your state unemployment agency



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Old 01-26-2013, 02:22 AM
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Thanks so much for the response. I should have noted I was in Oregon and that I would meet the earnings and hours eligibility requirements except for the fact I am an LLC. I will check in with the State Unemployment Office for more details. It's encouraging to know that there may be some assistance available.

Thanks again!



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