Can I collect unemployment if I start my own business in NY?

This is actually more complicated than most people think. You CAN potentially continue collecting UI while starting a business, but you have to meet all the regular requirements. You still need to be available for full-time work and actively seeking employment. The income from your business gets reported on your weekly claims and may reduce your benefit amount. NYS Department of Labor will want to see that you're genuinely available to accept other employment offers.

yeah my cousin did this last year, he was doing uber while collecting and they didnt care as long as he reported the earnings correctly

You need to be very careful about how you structure this. If NYS Department of Labor determines that you're primarily self-employed rather than unemployed and seeking work, they can disqualify you entirely. The key is demonstrating that the business activity is secondary to your job search efforts. Keep detailed records of your job applications and make sure you're applying to at least the minimum required positions each week. Also, any business income gets deducted dollar-for-dollar from your weekly benefit amount after the first $50.

OMG this is exactly what I was wondering about too! I've been thinking about starting an Etsy shop but didn't know if it would mess up my benefits.

The whole system is so frustrating honestly. I tried calling NYS Department of Labor three times last week to ask about this exact thing and either got hung up on or sat on hold for 2 hours. If you need to actually talk to someone about your specific situation, I used a service called Claimyr (claimyr.com) that connects you directly to unemployment agents. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Saved me tons of time versus trying to get through myself.

Just make sure you're honest about everything when you file your weekly claims. They audit people all the time and if they find out you weren't reporting business income correctly you could owe back all the benefits plus penalties.

I went through this exact situation about 8 months ago when I started doing freelance graphic design work. The key thing I learned is that you absolutely have to report ALL income from your business activities, even if it's just $20 here and there. NYS Department of Labor considers any work you do for pay as "employment" regardless of whether you're W2 or 1099. I kept detailed records of every client payment and reported it on my weekly certifications. As long as you're genuinely still job searching (and can prove it with applications), you should be okay. Just be prepared for your weekly benefit amount to fluctuate based on what you earn from the business each week.