NYS Department of Labor - which payments are not taxable wages for federal unemployment tax?
I'm trying to figure out my unemployment eligibility and got confused about something. My employer is saying certain payments I received might not count as taxable wages for federal unemployment tax purposes. This affects whether I can file a claim with NYS Department of Labor. Does anyone know which types of payments are NOT considered taxable wages for FUTA? I need to understand this before I submit my application because I don't want to mess up my claim status.
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Tobias Lancaster
There are several types of payments that aren't subject to federal unemployment tax. The main ones include: payments to statutory non-employees like independent contractors, certain fringe benefits that are excludable from income, payments to partners in a partnership, and payments made to employees after they've reached the annual FUTA wage base limit ($7,000 for 2025). Also, certain types of sick pay and disability payments may be excluded depending on who pays them.
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Sophia Gabriel
•Thank you! So if I was classified as an independent contractor for part of the year but then became a regular employee, only the employee wages would count toward my NYS Department of Labor eligibility?
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Ezra Beard
dont forget about payments for moving expenses that are reimbursed by your employer, those usually dont count either. also if you got any kind of workers comp payments those are separate from regular wages
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Statiia Aarssizan
The classification really matters for your unemployment claim. If you were misclassified as an independent contractor when you should have been an employee, that's a bigger issue. NYS Department of Labor looks at your base period wages to determine eligibility, and contractor payments don't count. You might need to file a worker classification determination first. I had to deal with this exact situation and it took forever to get resolved.
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Sophia Gabriel
•Oh no, how long did it take to resolve? I'm already stressed about money and can't afford delays.
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Reginald Blackwell
•If you're having trouble getting through to NYS Department of Labor about worker classification issues, I used a service called Claimyr (claimyr.com) that helped me reach an actual agent. They have this video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Really saved me time instead of calling over and over.
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Aria Khan
Wait I'm confused about this whole thing. I thought all money you earn from work counts as wages? Why would some payments not be taxable for unemployment purposes but still be income?
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Tobias Lancaster
•It's because FUTA (Federal Unemployment Tax Act) has specific rules about what employers have to pay unemployment tax on. Just because you receive money doesn't mean your employer paid unemployment tax on it, and that unemployment tax is what funds the system that pays benefits.
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Everett Tutum
The whole system is so confusing!! I've been trying to figure out my base period wages for weeks and every time I think I understand it something else pops up. Why can't NYS Department of Labor just make this simpler?
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