Guide to the Pandemic Unemployment Assistance for Self Employed People
DISCLAIMER: I am not a representative or employee of the government. I am simply a CPA that cares a ton for her clients that are struggling with all of the BRAND NEW information regarding the CARES Act and unemployment. All opinion is simply an interpretation of the CARES Act and not to be used as support or guidance for applying for an assistance programs or any other financial related advice.
This blog is for self employed individuals, independent contractors and business owners.
Unemployment is super confusing right now. And I do want to explain that although a lot was passed in the CARES Act, most of it is administered by the state. Most? Yes I know, I’m like three sentences in and it’s already confusing.
And to preface, all of these benefits outlined below are taxable.
Let’s dive in…
PUA aka “Unemployment Substitute”
Pandemic Unemployment Assistance (PUA): Extends unemployment benefits to workers/self-employed people who don’t ordinarily qualify. In laywomxn’s terms – this is the self-employed version of unemployment.
1. Are you eligible?
If you are self-employed, a subcontractor, have wages not reported for unemployment insurance (officer only S corp wage), part-time and were going to start working but couldn’t because of Covid-19.
2. How much will you get?
Minimum is $205 and you could get between $205-$648 weekly. It is based on your NET earnings (income after expenses).
3. How do I prove my income?
You need to provide your 2019 business tax return, 2019 pay stubs and/or 2019 W2.
4. Is it retroactive?
Depending on the state, it is possible to get retroactive benefits back to February 2nd, 2020. NOTE: You still need to qualify EACH week.
5. How do I show I was self employed?
There is a self-certifying form when you apply. If its not true, you’ll have to pay it back and may face criminal prosecution.
6. Will my benefits change if I work during the week?
Yes most likely. In your weekly claim you need to report self employment earnings – definitions of this vary in each state. Generally, it will be income less expenses for the week.
7. I’ve had both self-employed income and W2 income in the last year, does this disqualify me?
Maybe, because you could be eligible for regular unemployment. This is why states have you first apply for UI, get denied and then for PUA. If you go through this process and report all earnings it should answer this question for you.
8. If I had a loss last year am I still eligible for this benefit?
I believe so. There is nothing stating that you can’t have losses.
FPUC aka “Extra $$”
Federal Pandemic Unemployment Compensation (FPUC): An additional $600 of benefits each week in addition to other Unemployment Insurance (UI) or similar benefits you are eligible to receive. In laywomxn’s terms – this is that extra $600 you keep hearing about.
1. Are you eligible?
Yes if you qualify for regular unemployment or “substitute unemployment” (PUA), among many other programs.
2. How long does it last?
Weeks between 3/29/2020 & 7/25/2020
3. Do I need to apply separately to get these funds?
No, its automatic when you file your claims with the PUA.
4. Will my benefits change if I earn money during the week?
Maybe (most likely). Each state varies on this.
PEUC aka “Bonus Weeks”
Pandemic Emergency Unemployment Compensation (PEUC): Pandemic Emergency Unemployment Compensation (PEUC) is a 13-week extension for Unemployment Insurance benefits for those who have run out of regular benefits, and remain out of work. In laywomxn’s terms – if you still aren’t in business or working you get another 13 weeks!
1. Are you eligible?
Option 1:
Your claim balance is $0 (all available regular benefits have been paid),
Your claim has not yet expired, or
You do not have a regular unemployment claim available in another state, Canada, or through another federal program.
Option 2:
Your last valid claim expired July 6, 2019 or later, and
You do not have a regular unemployment claim available in Oregon, another state, Canada, or through another federal program.
2. How does it work?
You’ll get the same benefit that you got in either the PUA or UI. If you still can you’ll also still get the $600.
3. When to apply?
Depending on the state you will be sent a letter with instructions on how to apply.
Okay so how to get the “unemployment substitute”, “extra $$” and “bonus weeks”…
(this depends on each state, but generally speaking)
First, apply for regular unemployment benefits.
Second, apply for the PUA “unemployment substitute”
Third, apply each week – reporting all your income until you are back in business
Fourth, if you are still out of work after the 39 week period – apply for the “bonus weeks”
Torn between PPP and Unemployment?
You cannot be on unemployment for the 8 week period that you have the PPP. So when does unemployment make more sense than the PPP?
Your net self employed income or W2 S corp wages are under $45k
Your business is completely closed with no opening date in sight
Your employees make more on unemployment
You risk needing to lay off employees after the 8 week period again
You don’t have significant rent or utilities expense (a brick and mortar)
