Unemployment for self-employed - 3 steps to collect

Unemployment benefits for freelancers who become unemployed have been a hot topic in recent years.

The big question is: Can self-employed get unemployment benefits? Good news—YES. Thanks to the CARES Act, self-employed professionals are now eligible. Of course, there’s a process to follow and a few conditions to meet. 

In this guide, we’ll break down the 3 simple steps to help you apply for unemployment benefits without feeling overwhelmed. Ready? Let’s see!

Can self-employed file for unemployment? 

Earlier, people who identified themselves as self-employed couldn’t collect unemployment benefits–until the US Congress passed the $2.2 trillion CARES Act in March 2020 due to the COVID-19 pandemic. This law went down in history as the largest financial rescue package in US history.

Currently, self-employed people can now receive unemployment benefits if they can prove that their income has been affected by the crisis.

So what are the qualifications to apply for unemployment benefits? These and other questions abound among self-employed people now seeking crisis relief. 

Who is defined as self-employed?

First of all, we should define who can be considered as a self-employed worker. Let’s learn more about if you are eligible for unemployment for self-employed.

The IRS defines self-employed professionals as follows:

• If you carry on a trade or business as an independent contractor or a sole proprietor (With the extended CARES Act, freelancers and sole proprietors can apply for independent contractor unemployment benefits)
• If you are a member of a partnership of a trade or business
• If you are doing a business for yourself, including a part-time business

Check your eligibility

For a practical eligibility check, use the CareerOneStop website sponsored by the US Department of Labour. On this site, you will find information about unemployment insurance in each state and application forms.

Types of unemployment benefits for self-employed

We have given below the types of self-employed unemployment benefits designed for different situations.

1. CARES Act

Unemployment benefits are now available to Americans who have lost work because of the COVID-19 crisis—including independent professionals, contractors, and other self-employed workers. If you apply for unemployment for the self-employed, get more information about the CARES Act.

2. Paycheck Protection Program (PPP)

The Paycheck Protection Program is a loan planned to provide an immediate incentive for small businesses to retain their payroll workers. If you need more information or have questions about your eligibility, you can learn more about the Paycheck Protection Program here.

3. Freelancers’ Relief Fund (FRF)

Freelancers Union operates the Freelancers Relief Fund, and it is assisting up to $1,000 per household to those who are qualified for unemployment for freelancers to cover lost income and essential expenses. You can read the announcement here.

4. Disaster Unemployment and Assistance

FEMA’s Disaster Unemployment Assistance program provides unemployment benefits to individuals who have become unemployed due to an incident or a major disaster. Check the requirements to see if you are eligible for assistance.

5. Self-Employment Assistance Program (SEAP)

With the Self-Employment Assistance Program (SEAP) help, you can now apply for Unemployment Insurance benefits to pay your utilities and bills while you work on your dream. Check out the requirements.

How to apply for unemployment if you are self-employed?

Below, we aimed to help you learn “What is the application process unemployment for self-employed?” in 3 steps.

1. Get your docs ready
2. Apply online
3. Receive your payment

Step 1 – Prepare your documents

As the documents needed vary from state to state, we have only included the documents required for each application below. But you should still check the documents needed by your state.

Step 2 – File a claim for unemployment

First of all, you need to know how to fill out unemployment for self-employed people. Each state has its own online platform. The fastest way? Apply online! You can also apply by phone, mail, or fax.

You find each state's phone number and website by clicking here. After you find out which website to use for your application, you can apply for your unemployment benefits just as you would apply for regular UI benefits.

Step 3 – Receive benefit payments

It may take about 2-3 weeks after you apply to receive your first unemployment benefit payment. If you choose to receive benefits with an EDD Debit card, Bank of America will mail you a card when payments are ready.

Stay updated with Ruul blog, we are following up all the legal updates to develop helpful products and solutions. 

FAQ

Can self-employed people get unemployment?

Yes, with the CARES law passed by the US Congress, freelancers, gig workers, and small business owners can receive unemployment benefits.

Can a business owner collect unemployment?

If you are trading as a sole proprietor or running a small business, you have the chance to benefit from unemployment benefits.

Can freelancers get unemployment?

Yes, freelancers who earn income through digital work can receive unemployment through CARES and other benefit funds.