I have a seasonal business that is an S Corp of which I am the only employee. Do I need to pay state unemployment? I have been doing this but cannot collect in my off months.

Could I collect if the business was classified as say an LLC or something else?

Thank you!!

#1; you should be taking a salary from the s-corp and you are required in most states to pay state unemployment on that, and FUTA. even though you wouldn't be eligible to collect on it. Unless your state exempts wages paid to the owners of closely-held corporations from SUTA taxes then the S-Corp must also be paying SUTA taxes.





#2; If you had an LLC instead of s-corp, all of the LLC, I mean MMLLC, earnings would be treated as self employment income on Sch SE, and you would not pay into unemployment taxUNLESS youhave an EE; however, an owner of a S Corp cannot collect unemployment "if the business is not making money or the officer does not take a salary" Perhaps it depends on your individual situation, so I would think that if you have no other source of income other than salary from the S Corp, there may be possibility to claim for unemployment compensation. To establish your eligibility for unemployment as an S corp you, as a shareholder and employee, should check your pay stub and see if an amount for unemployment insurance was deducted. Although an S corp shareholder/employee is technically eligible for unemployment, most will fail the second threshold test: States require unemployment-benefits recipients to be "actively seeking work." Courts have held that owners of S corps who keep the corporation viable, even though it has no revenue, are not actively seeking work because new work can come into the corporation at any time. In other words, states often think that S corpo owners will close down the business simply to wait out a poor business cycle. To collect unemployment, you will have to prove to the state that the S corp is no longer viable, and you are conducting a job search.