Can an LLC owner collect unemployment benefits from NYS Department of Labor?
I've been running a small consulting LLC for the past 2 years but business has completely dried up. I'm basically making zero income now and considering shutting it down. Can I file for unemployment with NYS Department of Labor as an LLC owner, or am I automatically disqualified because I'm self-employed? I never took a W-2 salary from the LLC, just distributions when there was profit. Really confused about whether I have any options here.
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Yara Campbell
Generally speaking, LLC owners who are self-employed can't collect regular unemployment benefits from NYS Department of Labor. Since you didn't pay into the UI system as an employee, you don't have benefit credits. However, there might be some exceptions if you also had W-2 employment recently. Did you have any regular employment in the past 18 months besides your LLC?
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Ella rollingthunder87
•No, just the LLC for the past 2 years. So I'm basically out of luck then? That's really frustrating.
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Isaac Wright
wait i thought all business owners could get unemployment now?? my friend who has a hair salon said she got benefits during covid
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Yara Campbell
•That was different - during the pandemic there were special programs like PUA that covered self-employed people. Those programs ended in 2021. Regular NYS Department of Labor unemployment only covers people who were employees and paid into the system.
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Maya Diaz
You're correct that standard unemployment benefits require previous W-2 employment with UI contributions. However, you should check if your LLC elected to be taxed as an S-Corp and you took a salary. If you paid yourself as an employee of your LLC (which some business owners do for tax reasons), then you would have UI coverage. You can check your benefit eligibility by calling NYS Department of Labor directly, though their phone lines are notoriously busy.
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Ella rollingthunder87
•No, we didn't elect S-Corp status. Just stayed as a regular LLC. Sounds like calling NYS Department of Labor is my only option to be 100% sure.
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Tami Morgan
•Good luck getting through to them! I've been trying to reach someone at NYS Department of Labor for weeks about my claim. If you're having trouble with their phone system, I recently found this service called Claimyr (claimyr.com) that actually got me connected to an agent. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Might be worth checking out if you can't get through the normal way.
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Rami Samuels
This whole system is so unfair! Small business owners pay taxes just like everyone else but when we need help we get nothing. Meanwhile people who get laid off from corporate jobs get benefits for months. The government doesn't care about entrepreneurs at all.
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Haley Bennett
•I understand the frustration, but unemployment insurance is specifically designed as insurance for employees who lose their jobs through no fault of their own. Business owners take on different risks and rewards. There are other programs like SBA loans that are designed to help businesses during tough times.
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Douglas Foster
Same boat here - had to close my photography business last year and couldn't get any unemployment. Ended up having to take a retail job just to qualify for benefits if I ever get laid off again. It's backwards but that's how the system works.
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Sean Kelly
Have you considered looking into New York State's other assistance programs while you're figuring out the unemployment situation? The Department of Social Services has programs like SNAP (food assistance) and emergency cash assistance that might help bridge the gap. Also, if you're planning to shut down the LLC, you might want to consult with an accountant about any tax implications - sometimes there are deductions or loss carryforwards that can help reduce your tax burden. It's not unemployment benefits, but every bit helps when cash flow is tight.
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Kennedy Morrison
•That's really helpful advice about looking into other assistance programs! I hadn't thought about SNAP benefits. Do you know if having an LLC (even one that's not making money) affects eligibility for those programs? I'm worried they might see me as "employed" even though I'm making zero income. And yeah, definitely need to talk to an accountant about shutting down properly - don't want to get hit with unexpected tax issues on top of everything else.
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