Can LLC owner collect unemployment benefits from NYS Department of Labor?
I owned a small consulting LLC for the past 2 years but had to shut it down last month due to lack of clients. I'm wondering if LLC owners are eligible for unemployment benefits through NYS Department of Labor? I did pay into the system when I had employees, but I'm not sure about my own eligibility as the owner. Has anyone been in this situation before?
10 comments


Alexander Zeus
Generally speaking, LLC owners are not eligible for traditional unemployment benefits from NYS Department of Labor because you're considered self-employed, not an employee. However, there are some exceptions depending on how your LLC was structured and whether you elected to be treated as an S-corp for tax purposes. Did you pay yourself through payroll with unemployment taxes withheld?
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Olivia Harris
•No, I just took owner draws. I didn't set up formal payroll for myself, only for the two employees I had.
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Alicia Stern
If you didn't pay unemployment taxes on your own wages as an LLC owner, then unfortunately you won't be eligible for regular UI benefits. The NYS Department of Labor requires that you've had wages subject to unemployment insurance contributions. Your best bet might be to look into other assistance programs or start applying for traditional employment so you can build up eligibility for future claims.
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Olivia Harris
•That's what I was afraid of. Thanks for clarifying. I guess I should have set up payroll for myself too.
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Gabriel Graham
wait i thought all business owners could get unemployment now?? my cousin said something about that
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Alexander Zeus
•You might be thinking of the pandemic programs like PUA, but those ended in 2021. Regular unemployment rules are back in effect now.
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Drake
I had a similar issue trying to get through to NYS Department of Labor to ask about my eligibility when my partnership dissolved. The phone lines are impossible - kept getting disconnected after waiting for hours. Finally used this service called Claimyr (claimyr.com) that actually got me through to a real person at NYS Department of Labor. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. The agent was able to explain my specific situation and what options I had. Might be worth checking out if you need to speak with someone directly about your LLC situation.
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Olivia Harris
•Thanks, I'll look into that. I do want to get a definitive answer from NYS Department of Labor about my specific case.
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Sarah Jones
•Never heard of that service but honestly anything is better than trying to call NYS Department of Labor directly. Those wait times are brutal.
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Sebastian Scott
Just to add - if you're looking for work now, make sure you understand the job search requirements once you do become eligible for benefits in the future. NYS Department of Labor has specific rules about documenting your job search activities.
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