Do self employed pay unemployment tax to NYS Department of Labor?
I've been freelancing for the past 2 years and thinking about switching to W2 employment. My accountant mentioned something about unemployment taxes but I'm confused - as a self-employed person, do I pay into the NYS Department of Labor unemployment system? I know I pay self-employment tax but I'm not sure if that includes unemployment benefits or if that's separate. If I switch to regular employment, would I be eligible for UI benefits right away or do I need to work a certain amount first?
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Mateo Lopez
No, self-employed individuals don't pay unemployment taxes to NYS Department of Labor. Only employers pay unemployment insurance taxes (SUTA) on behalf of their W2 employees. As a freelancer, you're not eligible for regular unemployment benefits. However, if you become a W2 employee, you'll need to work long enough to meet the base period requirements - typically you need wages in at least two quarters of your base period to qualify for UI benefits.
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CyberNinja
•Thanks! So if I start a W2 job in January, when would I potentially be eligible for unemployment if something happened?
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Aisha Abdullah
wait i thought there was some program for freelancers during covid? my brother was getting unemployment and he was a contractor
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Mateo Lopez
•That was PUA (Pandemic Unemployment Assistance) which ended in 2021. It was a temporary federal program that covered self-employed, gig workers, and contractors. Regular NYS Department of Labor unemployment insurance still doesn't cover self-employed people.
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Ethan Davis
You're correct that self-employed don't pay into the unemployment system. But there's an important detail about switching to W2 work - you'll need to earn sufficient wages during your base period to qualify. For 2025, you need at least $2,940 in total wages and wages in at least two quarters of your base period. The base period is typically the first four of the last five completed calendar quarters before you file.
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CyberNinja
•That's really helpful to know the specific amount, thank you!
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Yuki Tanaka
ugh the whole system is so confusing!! why can't they just make it simple - if you work you should get benefits if you lose your job regardless of how you work
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Carmen Ortiz
I was in a similar situation last year - went from freelancing to a full-time job. Had trouble getting through to NYS Department of Labor when I needed to check my eligibility after getting laid off 8 months later. Ended up using this service called Claimyr (claimyr.com) that helped me actually reach a live agent. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Really saved me hours of trying to call myself.
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MidnightRider
•How does that work exactly? I've been trying to reach someone at NYS Department of Labor for weeks about my claim status.
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Andre Laurent
just to add - even though you don't pay unemployment tax as self employed, you might want to consider if there are any other benefits you're missing out on. like workers comp, disability insurance, etc. the whole benefits package can be pretty different between 1099 and W2
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