Okay, here's my dilemma...I'm so JAZZED about starting up this business and am in the early stages of this process but I'm paralyzed by this one issue...

I was laid off from a full time position in the area and have just decided to go for the gusto in starting this business up full time. The thing is, I am currently collecting unemployment because I'm also looking for a full time job since I am not sure if this VA business is going to get off the ground to a running start, although I'm optimistic!

Are there any suggestions on filing for unemployment insurance while I start this business? I want to do everything legally and by the book, but also try to make this VA business work, too...but I need SOME income, so the unemployment checks I'm receiving are necessary! Any advice on this would be just terrific. Thanks!

We looked into this when I was laid off and our state, Florida, will not allow me to collect unemployment while I owned a business, even if I was not making any money. You need to check it out with someone in your state to see if they will allow it. All states have different rules.

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UPDATE: Here's what I learned! When I contacted the Unemployment Insurance (UI) office, the rep told me that the state of WA allows people to continually receive UI benefits while starting up their company. The catch is that if you earn any money while in start up mode, you just report what you earned (gross) for the week you're claiming and they simply deduct that dollar amount from your check. Then, if it becomes a frequent thing, they simply send you a questionnaire in the mail that requires you to complete and send back. Based on your answers, your claim is either denied or continues.

I will tell you, that I have struggled with this because I want to start out the right way and not have to explain myself out of a mess, if I get some business from a legitimate company.

The bottom line is, if a company is paying you money to do work, they will be required to report it for tax purposes...the same holds true for you--if you offer a service using your company name, then you are required to do the same. It just makes good business sense.

Hope this helps!

Thanks,

Kathya

I know this is a few months old, but just wanted to say WOW! Kathya, you're very lucky! I'm just dealing with this today... I was all pumped up and ready to go, even got my company's name registered with the county, but I'm currently collecting UI from NJ (long story...) and I don't think I can continue to collect once I officially open my company for business. What I don't know, and would like for someone in NJ UI to explain, is what the difference is between claiming self-employment wages (which I'm asked for each time I apply for weekly benefits) and getting them through a company that you own. But each time I've called, the wait time is over an hour (eeks!), so it may be a while until I get that answer. I'm just hoping that doesn't mean that I have to put this on hold, but right now, I can't afford to forgo the UI. Again, ugh...

--Samantha

If anyone knows about the Michigan law I would appreciate any info.... I just started unenjoyment and don't want to get in trouble for anything...

That is so sad, that a state would deny benefits for merely owning -- not profiting from -- a business. What a way to stimulate gainful employment -- by discouraging self-employment! For those unsure of how to proceed with their claim, be assured that the intial forms required will thoroughly question business-ownership status and other money-making ventures. The process is not a matter of being clever, but rather giving truthful answers to very straightforward questions, and then waiting (possibly awhile) for the verdict.

I agree that it's sad, although I can (half?) see their point. The point of UI is to provide you with assistance while you're looking for full-time employment. When you apply for your benefits each week, at least in NJ, you're asked if you were actively looking for work and available to work for each of those weeks. If you're concentrating on building your own business, the argument could be made that you're not doing those things. I get that. Some states actually offer assistance to the unemployed who are trying to start their own business (in lieu of receiving UI), but it's only available in NJ if the business you're starting would be *in* NJ (which mine wont' be). So I'm stuck.

I did speak with my former state senator's office this morning to ask about the difference between claiming wages earned through self-employment vs. owning your own business, and I'm waiting to hear back from them with the answer. (The assistant I spoke to agreed that it was a good question and is looking into it.) Once I hear back, I'll have a better idea what the deal is, and I'll certainly post an update then. Until then, I'll have to keep up my job search as well, because I can't really afford to be without UI at this point.

I guess we'll have to wait and see!

--Samantha

Originally Posted by Samantha T

The point of UI is to provide you with assistance while you're looking for full-time employment. When you apply for your benefits each week, at least in NJ, you're asked if you were actively looking for work and available to work for each of those weeks. If you're concentrating on building your own business, the argument could be made that you're not doing those things. --Samantha

Yes. Yet I know of people -- some VAs in this forum, in fact -- who at least started out working full time, and launching their business beyond business hours. So it would stand to reason that someone could be actively seeking full-time employment and available to work each week, while spending a few hours a week on a part-time venture. I'm certainly not an authority on this. And as you say, each state is different. Just looking at it philosophically.

Oh, I totally agree with you. But we're talking about the government here. Not sure they've realized that it's possible to focus on multiple tasks like that. LOL!

--Samantha

Originally Posted by Samantha T

I know this is a few months old, but just wanted to say WOW! Kathya, you're very lucky! I'm just dealing with this today... I was all pumped up and ready to go, even got my company's name registered with the county, but I'm currently collecting UI from NJ (long story...) and I don't think I can continue to collect once I officially open my company for business. What I don't know, and would like for someone in NJ UI to explain, is what the difference is between claiming self-employment wages (which I'm asked for each time I apply for weekly benefits) and getting them through a company that you own. But each time I've called, the wait time is over an hour (eeks!), so it may be a while until I get that answer. I'm just hoping that doesn't mean that I have to put this on hold, but right now, I can't afford to forgo the UI. Again, ugh... --Samantha

Hi Samantha,

I'm in NJ and collected UI for the first 6 months of my business. I was also nervous (and it's impossible to get the same 2 answers from anyone at UI), but just reported my income honestly. To tell you the truth, I thought I was doing really well income wise, but they never deducted a cent from my check , so maybe I wasn't doing so well. To tell you the truth, I could not have started the business without those additional funds. After the first 6 months, the declined my extension though, due to the income. By that time, I was able to just eke by.

Good luck with your business!

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