Do business owners have to pay unemployment on themselves - NYS Department of Labor requirements?
I just started an LLC in New York and I'm confused about whether I need to pay unemployment insurance on myself. I've been reading the NYS Department of Labor website but it's not super clear. I know I have to pay for any employees I hire, but what about me as the owner? I don't want to mess this up and get in trouble later. Has anyone dealt with this situation before?
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Aria Park
It depends on your business structure. If you're an LLC member or sole proprietor, you typically can't pay into unemployment for yourself because you're considered self-employed, not an employee. However, if you elect to be treated as an S-Corp and pay yourself a salary, then yes, you'd need to pay unemployment taxes on that salary. The NYS Department of Labor considers you an employee of your own corporation in that case.
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Lucas Notre-Dame
•That makes sense! I'm just a regular LLC member, so sounds like I don't need to worry about it for myself. Thanks for clarifying the S-Corp difference.
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Noah Ali
wait i thought you could voluntarily pay into unemployment as a business owner?? my accountant mentioned something about this last year but i never followed up on it
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Chloe Boulanger
•You're thinking of something different. Business owners can't voluntarily pay unemployment insurance on themselves in New York. You might be thinking of voluntary disability insurance or workers' compensation coverage, which are separate programs that some self-employed people can elect into.
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James Martinez
I went through this exact situation when I started my consulting business three years ago. Spent weeks trying to get through to someone at NYS Department of Labor to clarify because their website wasn't clear. The phone lines were always busy and when I did get through, I got transferred around multiple times. Finally used a service called Claimyr (claimyr.com) that helped me get connected to an actual agent who explained everything clearly. They have a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me so much time and frustration.
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Olivia Harris
•Interesting, never heard of that service before. Did they charge a lot for helping you get through to NYS Department of Labor?
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James Martinez
•It was worth it for me because I was wasting hours trying to call. The peace of mind from getting a clear answer was valuable, especially when starting a new business and worrying about compliance issues.
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Alexander Zeus
This whole system is SO confusing! I've been running my photography business for two years and still don't understand half of what the NYS Department of Labor requires. Why can't they just make this stuff easier to understand?? It's like they want small business owners to fail.
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Aria Park
•I understand the frustration, but the rules are actually pretty straightforward once you know them. The key is understanding whether you're an employee or self-employed. Most small business owners are self-employed and don't need to worry about unemployment insurance for themselves.
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Alicia Stern
Just to add - make sure you understand the difference between state unemployment and federal unemployment taxes too. Even if you don't pay state unemployment on yourself, you still might have other tax obligations depending on your business structure and income level.
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StarSailor}
Great point about federal vs state taxes! As someone who just went through setting up my own LLC last year, I learned this the hard way. Even though I don't pay state unemployment on myself as a single-member LLC, I still had to deal with federal self-employment taxes and quarterly estimated payments. The IRS and NYS Department of Labor have completely different requirements, which adds another layer of confusion. Definitely recommend talking to a tax professional early on to avoid surprises at tax time.
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