Can a 1099 Contractor Collect Unemployment?

Question

I understand that employers do not pay Federal Income taxes for their 1099 contracted employees; does this mean that I cannot collect unemployment if I need it?

My last contracted work was a six month contract in the state of California.

This six month project was my very first 1099 contract. I havn't paid my own taxes as of yet. I know it's something I should have done quarterly and I still need to take care of it this year. Sounds like I am inelligible huh?

Answer 1

You can apply for unemployment compensation, and a determination will be made after your application is reviewed. You must meet other qualifications to be eligible. You must have adequate quarters prior to your six months of 1099 work. You are considered self employed during that time. The reason you left your job prior to your self employment is also a factor.

You apply for unemployment compensation in the state you are currently living, even if you worked in California. If you are still in California, here is the link to your state

http://www.edd.ca.gov/uirep/uimer.htm

You may be eligible as a self employed individual but, it depends on whether your self employment has been ongoing in nature, and whether it is likely to continue as ongoing. If you only had 6 months of self employment, with that alone, you will not qualify for benefits, according to CA statutes.

See Section 704 thru Section 705
http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=30693418022+0+0+0&WAISaction=retrieve

If you have a history of self employment and you do not intend to end that type of work, then your 6 month 1099 contract in CA will help your claim.

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EDIT: To answer your additional details, you should file a claim and see if you are allowed unemployment compensation based on your previous employment. From what you have described, the pay from your 6 month 1099 contract wouldn't be eligible to be included in your base year wages. In California, self employment will qualify some workers for unemployment compensation, but unfortunately not in your case.

PS: Figure your taxes, including SE taxes, early so you aren't shocked come April 2008. Send in your quarterly payments as soon as you can to reduce the late payment penalty.
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Answer 2

Independent Contractor Unemployment

Answer 3

Can Independent Contractors Get Unemployment

Answer 4

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Your question involves a legal issue. A 1099 contractor works by his own rules, being that you've stated your an office manager leads me to believe that they have set particular hours for you to work. They also provide to you the tools in which to do your job. In the state of Texas labor laws state that as a contractor you basically can never be told when to do a job, when to arrive, they cannot provide company vehicles, nothing that would stipulate the terms of an official employment. I can't see it being possible for this company to offer this position, yet still conform to 1099 contractor regulations. The company itself may be disolving for reasons unbecoming, but in the eyes of the IRS this is called tax evasion. Upon filing a claim for unemployment these issues will come to surface, you may have some explaining to due but eventually your claim should be settled in your favor. I hope that your paying in on social security, for your own sake. Spock is correct in proceeding as if your an employee. The company you worked for is certainly doing some tax evasion, sounds as if they're suffering from the choices they've made & as such so are you. Unless the company is a complete idiot, they will not contest you being an employee. If they did then the state would most certainly be involved, but what about the damage that's been done to your life? How much of your time has been invested into this company? I'd consult an attorney to see if they'd possibly be liable "financially" for their wrong doings to you.

Answer 5

1099, nope, you are viewed as self-employed and can control your own work. You are not an employee you are an independent contractor. It is not fair. Also, you get they joy of paying twice as much for FICA as a 1099, employers pay 1/2 for employees. There are ways a 1099er can change. You can form a corp and give yourseld a salary then you could get unemployment. Also, companies would rather have you work as an independent contractor because it is cheaper. However, there are laws to make sure employers do not improperly classify employees as independent contractors, this can help some people.

Answer 6

Well, you're considered to be YOUR OWN employer at that point. But your Federal Income taxes have little to do with it, except for establishing your prior income as far as unemployment is concerned.

Have you been paying your own state unemployment taxes? If so, you could probably qualify for unemployment (assuming you meet the other guidelines -- which is to say that you were let go for some reason that was beyond your control and not because your contract ended.)

You'll probably have to visit an unemployment office (and take all of your most recent tax returns) to find out for sure.

Good luck!

Answer 7

a 1099 contractor employee is required to pay their own social security, medicaid and unemployment insurance. If you have been paying these items, of course you can collect unemployment. If you havent, then you have no unemployment to collect.

Only you can answer that question. Im sure you know if you have been paying into unemployment or not. Somebody has to pay the unemployment, in this case its you.

*update*

Clearly I need to explain in detail figured you guys would have got this. Yes I can collect unemployment if my company lays me off. Its actually really beneficial way to do taxes. Maybe Im the only one that has a good tax accountant and attorney. So personally I can collect unemployement the way im set up.

Answer 8

You are not eligible for unemployment compensation. This is reserved for those who work as employees for an employer who contributes to the unemployment fund via taxation.

When you are an independent contractor, you don't get such a benefit.

Answer 9

Sounds like you did not know what your responsibilities were prior to engaging in your work as a 1099 consultant. I would find some kind of job, anything, just to get money together to take care of your responsibilities. Then I would hire an accountant who can set you straight.

Answer 10

That's what it means - you can't collect. Your work as an independent contractor isn't covered for unemployment comp. A company pays into u.c. for its employees, but not for independent contractors.