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QuantumQuest

Can you collect unemployment if you own your own business - NYS Department of Labor eligibility questions

I've been running a small consulting business for the past two years but work has completely dried up. I haven't had any clients in over a month and my savings are running out. I know I pay into unemployment insurance as a self-employed person, but I'm not sure if I can actually file a claim with NYS Department of Labor since I technically still own the business even though it's not generating any income. Has anyone been in this situation? Do I need to officially close the business first or can I file for UI benefits while keeping it open but dormant?

Amina Sy

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Yes, you can potentially collect unemployment as a business owner in NY, but there are specific requirements. You need to show that you're unemployed through no fault of your own and that your business income has essentially stopped. The key is proving you're available for work and actively seeking employment. You'll need to report any business activities during your weekly claims even if they don't generate income.

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QuantumQuest

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That's helpful, thank you! Do you know if I need to provide documentation showing the business income stopped? I haven't had any revenue since December but the business is still legally active.

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i think you have to close the business completely but im not 100% sure. my friend tried this last year and they made her shut everything down first

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Actually, you don't necessarily need to close the business. The NYS Department of Labor looks at whether you're actually working and earning income, not just business ownership status. However, you'll need to be completely honest about any business activities on your weekly claims. Even unpaid work like marketing or business development could affect your eligibility. I'd recommend calling NYS Department of Labor directly to discuss your specific situation since self-employment cases can be complex.

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Good luck trying to reach anyone at NYS Department of Labor by phone! I've been trying for weeks to get through about my claim issues. The hold times are insane and half the time they just hang up on you.

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Emma Davis

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I had the same problem with getting through to NYS Department of Labor until someone told me about Claimyr. It's a service that helps you get connected to actual agents - they have this system that navigates the phone menus for you. Check out claimyr.com and they even have a demo video at https://youtu.be/qyftW-mnTNI showing how it works. Saved me hours of frustration trying to reach someone about my adjudication issues.

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GalaxyGlider

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The whole system is ridiculous. They make it so complicated for business owners when we're the ones who've been paying into unemployment insurance. I had to jump through hoops just to prove my business wasn't making money when it was obvious from my tax returns.

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Wait, I'm confused about this too. If you own a business but aren't making money, how do they determine your benefit amount? Is it based on previous W-2 earnings or the business income you reported?

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Amina Sy

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For self-employed individuals, NYS Department of Labor typically looks at your reported business income over the base period, which is usually the first four of the last five completed calendar quarters before you file. If you had W-2 income during that period too, they'll consider both.

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I went through this exact situation last year with my freelance graphic design business. You can file for unemployment while keeping your business open, but you need to be very careful about reporting everything accurately. The key thing is that you have to be "totally unemployed" - meaning you're not doing any work for the business, even unpaid tasks like updating your website or reaching out to potential clients. I had to essentially put my business in complete hibernation mode. Document everything - keep records of when your income stopped, any final client payments, etc. Also be prepared for them to ask detailed questions about your business activities during the adjudication process. It took about 6 weeks for my claim to be approved, but I did eventually get benefits based on my previous year's business income.

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Yuki Watanabe

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This is really helpful - thank you for sharing your experience! The "totally unemployed" requirement is something I wasn't fully aware of. Just to clarify, does that mean I can't even do things like check my business email or update my LinkedIn profile? And when you say you documented everything, did you need to provide bank statements or just keep your own records? I'm trying to figure out exactly what evidence I should gather before filing my claim.

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Luca Ricci

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@Isabella Martin Thanks for sharing your experience! That s'really reassuring to hear from someone who actually went through this process successfully. When you say you had to put your business in complete "hibernation mode, did" you have to formally notify any clients or vendors about suspending operations, or was it more about just not actively working? I m'wondering if I should send out some kind of formal notice to my client list explaining that I m'temporarily suspending services. Also, did NYS Department of Labor require you to show proof that you weren t'working during your claim period, or did they just take your word for it on the weekly certifications?

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Caden Turner

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I'm in a very similar situation with my marketing consulting business - no clients since late December and really struggling financially. Reading through these responses is incredibly helpful, especially Isabella's detailed experience. One thing I'm still unclear about though is the timing of filing. Should I wait until I've been without income for a certain period, or can I file as soon as the work dried up? I've been hesitant to file because I keep hoping a new client will come through, but at this point I think I need to be realistic about my situation. Also, has anyone had experience with NYS Department of Labor questioning whether you're genuinely seeking other employment opportunities while your business is dormant? I'm worried they might think I'm just waiting for my business to pick back up rather than actively looking for work.

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Oliver Wagner

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@Caden Turner I m'dealing with the exact same dilemma! My web development business has been dead since January and I ve'been going back and forth on whether to file. From what I ve'read here and researched online, you can file as soon as you meet the totally "unemployed criteria" - you don t'need to wait a specific amount of time. The key is being honest about your job search efforts. I think NYS Department of Labor expects you to be genuinely looking for work, not just waiting for your business to recover. You might want to start applying for some regular employment positions to show you re'serious about finding alternative income. That way if they ask during the adjudication process, you can demonstrate you re'actively seeking work beyond just hoping your consulting picks up again.

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@Caden Turner I was in almost the exact same boat last year with my freelance photography business. The waiting and hoping for clients to return while your savings dwindle is brutal. I finally filed after about 6 weeks of no income and honestly wish I had done it sooner. NYS Department of Labor doesn t'require you to wait - if you re'unemployed and meet the criteria, you can file right away. Regarding the job search requirement, they do expect you to be actively looking for work. I started applying for part-time positions and even some full-time roles as backup while keeping my business dormant. It actually helped during my phone interview with them because I could show I was taking concrete steps to find income, not just passively waiting. The weekly certifications ask specific questions about your job search activities, so having real applications and interviews to report made the process much smoother. Don t'wait too long - the benefits are calculated from when you file, not when you first became unemployed.

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Oliver Schulz

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I'm going through this exact situation right now with my freelance writing business. After reading everyone's experiences here, I decided to file my claim last week even though my business is technically still open. What really helped me was keeping detailed records of when my last client payment came in (December 15th) and screenshots showing zero new inquiries or projects since then. During my initial phone interview, the NYS Department of Labor representative seemed most concerned about whether I was doing any work activities at all - even things like updating my portfolio or networking. I had to assure them that I've completely stepped back from all business activities and am focusing solely on finding traditional employment. The process is definitely nerve-wracking, but based on what I've read here and my own research, as long as you're completely honest about your situation and can prove you're genuinely unemployed (not just slow), you should be eligible. The key is documenting everything and being prepared to show that your business income has truly stopped, not just decreased.

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@Oliver Schulz Thank you for sharing your current experience - it s'really helpful to hear from someone who just went through the filing process! I m'curious about the phone interview you mentioned. How long after you filed did they contact you for that interview? And did they ask for any specific documentation during that call, or was it more about verbally confirming your situation? I m'planning to file next week and want to make sure I have everything organized beforehand. Also, when you mentioned stepping back from all "business activities, did" that include things like maintaining your business licenses or basic administrative tasks, or just the actual work/marketing activities? I want to make sure I understand exactly what counts as work "in" their eyes.

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Nora Bennett

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@Oliver Schulz This is exactly the kind of real-time experience I was hoping to find! I m'in a very similar situation with my consulting business - last client payment was in early December and I ve'been agonizing over whether to file. Your point about documenting everything is really smart. I ve'been keeping records but hadn t'thought about taking screenshots of my empty inbox/project pipeline. When they asked about stepping back from all business activities, did they get into specifics about things like keeping your business bank account open or maintaining your LLC registration? I m'wondering if there s'a difference between administrative maintenance versus actual business operations in their view. Also, how long did they say the adjudication process would take in your case? I know it varies, but any timeline would help me plan financially.

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