I am self-em,ployeed. How do I get unemployment insurance?

Factual Questions
1

I make installments on estimated taxes already. Is it included in that?
thanks for any help.

2

You didn’t say what state you live in. In New York State, self-employed folks aren’t eligible for unemployment benefits. I suspect that may be universal.

3

I live in Florida.

4

My understanding is that unemployment benefits are paid for by employers. So even you could set it up for yourself, you’d be paying for it. Not much point, it seems.

5

No.

We self-employed folks prepare for possible unemployment (for us, this would be “lack of clients/customers,” as we can’t exactly lay off or fire ourselves) by keeping a hefty savings cushion in reserve. The typical suggestion is six months’ income; more is better, most of us seem to have less.

You can also buy disability insurance. I have a policy that’s also set up as life insurance and acts as a sort of investment. I’m a little hazy on the details, but IIRC it earns interest and eventually I would be able to borrow on it if I needed/wanted to, and once the balance is high enough, I can draw on that to make the premium payments if necessary.

6

It’s actually possible to do this.

In three states, Alaska, New Jersey and Pennsylvania employees as well as employers pay into a trust fund.

So if you live into those state even if you own your own business you should check.

If you did work for yourself and as an EMPLOYER paid into the UI trust fund you can collect. You obviously have to bring the paper work into the unemployment office to prove that you paid into the fund.

There are a bunch of states, Oregon and California (the ones I can remember from my H/R days) where if you’re a long term contractor the state courts have ruled that you are “in fact” an employee of the company for UI purposes and allowed these self-employed “long term” contractors to collect. So you have to check your state labor board to see if your state allows this

If you reside in an area declared a federal disaster area, you can collect UI as well. Some areas designated as state disaster areas you can also collect. This varies by state so you have to check.

I also recall a program for serviceman, like if you ran your own business and then quit to joing the military you can collect UI upon getting discharged. This was actually set up way back when the draft was still in effect, but it still works for the volunteer army.

But as long as you paid in and can prove it, you can collect. You may want to try it even if you can’t prove it. They almost certainly will say “no,” but you never can tell

7

It does vary by state. In Washington state, you might be required to pay UI, and yet still be ineligible for unemployment benefits. For example, if you own more than 10% of a corporation or you are a relative of a more than 10% owner of a corporation. I’ve had some clients who forgot the fine print and were unpleasantly surprised when years of mandatory UI payments to the state and fed for their spouse were worthless when the economy turned south.

If you are self-employed, there are a few things to look into:

  1. savings, obviously. Any self-employed person should, like any other business, have cash reserves to meet operating expenses.
  2. credit card insurance. While many of these policies exclude the self-employed, I’ve found that more and more of them will cover you. Make sure to read the fine print, but if they work, you’ll have minimum payments made for some time.
  3. disability/health coverage. If your inability to work is due to an injury, there are some good options. Many states permit you to buy into workman’s comp even when self-employed, and a combination of other policies can keep you on your feet financially even when you’re not on your feet physically.
8

Unemployment is cheap compared to the benefits. In Washington, many of my clients have a rate of just 0.35% of wages, capped at $37,500. That amounts to just $130 per year for benefits that would be in excess of $10,000 when laid off. That’s a minimum rate; most would pay closer to $600 per year, but that’s still a steal.

9

Here are a couple of articles that discuss the issues:

When A Small Business Fails, The Owner May Not Be Eligible For Unemployment

http://askfsb.blogs.fsb.cnn.com/2009/04/23/firing-yourself-unemployment-benefits-for-business-owners/

FWIW, independent contractors are generally ineligble for benefits: UNEMPLOYMENT: BENEFIT BASICS

10

I wouldnt’ mind paying if I could find out where. By the way, I don’t own a business, but I do freelance work. I’m not incorporated either.