Still eligible for NY unemployment as small business owner struggling after January wave?

This is a somewhat complicated situation with NY unemployment, but here's what you need to know: As a small business owner, you typically aren't eligible for traditional unemployment benefits unless you paid unemployment insurance taxes on your own wages. However, if you're significantly reducing your work hours and looking for full-time employment, you might qualify for partial benefits. You'll need to report any income you're still earning from your business during weekly certifications, and benefits will be reduced accordingly. Be completely honest about your continued involvement in the business - any misrepresentation could result in having to pay back benefits plus penalties. I recommend calling NYSDOL directly to discuss your specific situation before applying.

I was in this exact situation last year! My shop had been open 7 years when everything fell apart. NYSDOL makes it REALLY difficult to get through to anyone who can actually understand self-employment situations. After 3 days of calling and never getting through, I found this service called Claimyr (claimyr.com) that got me connected to an agent in about 20 minutes. They have a video showing how it works: https://youtu.be/Rdqa1gKtxuE The agent I spoke with confirmed I could get benefits while my business was severely reduced as long as I was actively looking for other work and reported any income I was still making. It saved my sanity not having to call hundreds of times.

the UI system isnt designed for small business owners at all. i tried last yr and got rejected even tho my business was barely making anything. they said i wasnt "unemployed" since i still owned the business!! total bs if u ask me.

The key thing is whether you can meet the "available for work" requirement while still running your business part-time. When you certify each week, you have to confirm you're ready, willing, and able to accept full-time work. If your continued business operations would prevent you from accepting a job, that could be problematic. You'll also need to document your active job search - NY requires you to make at least three work search activities each week. Keep detailed records of all applications, networking, interviews, etc. NYSDOL has been auditing these more frequently in 2025.

i just went thru this!!! make SURE u tell them exactly how many hours ur still working at ur business each week when u certify. they asked me for bank statements going back 3 months to verify my income had actually dropped. and they wanted proof i was lookng for other jobs. its doable but the paperwork is a nightmare lol

From a technical perspective, what matters to NYSDOL is: 1. Did you pay into the UI system as an employee of your business? (If you received W-2 wages and had UI taxes withheld) 2. Have you experienced a significant reduction in work through no fault of your own? (The market downturn would qualify) 3. Are you available for and actively seeking full-time employment? (This means being able to accept work if offered and documenting at least 3 work search activities per week) Your business structure matters significantly here. If you're an S-Corp or C-Corp where you paid yourself as an employee with proper payroll taxes, you'll have a much stronger case than if you're a sole proprietor who took owner draws. You'll need to provide your EIN number, business documentation, and tax returns when you apply.

my brother tried to get benefits while his contruction business was dead during winter and they DENIED him even tho he had zero income! system is rigged against small businesses i swear

One more important thing: If you do qualify and receive benefits while attempting to keep your business going part-time, be extremely careful about reporting ALL income during weekly certifications. NY uses a dollar-for-dollar reduction after you earn more than $504 in a week, and benefits completely stop if you earn more than your benefit rate. For calculation purposes, if you're still working at your business, you need to report gross earnings for any week worked, even if you haven't actually paid yourself yet. This is a common audit trigger for self-employed individuals.

dont give up ur business!! my friend got benefits for like 6 months while her shop was struggling and it gave her enough time to pivot to a new business model. shes doing ok now. sometimes u just need a bridge

Based on all the information you've shared in your responses, it sounds like you have a good case for UI benefits. With an S-Corp structure, proper tax payments, significantly reduced hours, and willingness to accept full-time employment, you meet the basic eligibility criteria. I'd recommend applying online through your NY.gov ID account, then immediately try to speak with a specialist about your self-employment situation to ensure your claim is processed correctly. Document everything meticulously - business financial records showing revenue decline, tax returns, hours worked, and especially all job search activities. The more organized your documentation, the smoother the process will be. Good luck with both your job search and keeping your business alive!

I went through something similar with my consulting business last year. One thing that really helped was keeping a detailed log of all my job search activities from day one - not just applications, but also networking events, LinkedIn outreach, informational interviews, etc. NYSDOL accepts a pretty wide range of activities for the work search requirement. Also, if you do get approved, consider setting up a separate business checking account just for tracking the reduced income from your business. It makes the weekly income reporting much cleaner and gives you clear documentation if they ever audit your claim. The cleaner your records, the less stress you'll have during the certification process. Your situation sounds very similar to what qualifies as "partial unemployment" in NY - you're not fully unemployed but your work and income have been substantially reduced through no fault of your own. That's exactly what the system is designed to help with.

I'm in almost the exact same boat - restaurant owner for 6 years and revenue has been absolutely brutal since January. I've been hesitant to apply because I wasn't sure if I'd qualify while still trying to keep the doors open a few days a week. Reading through all these responses has been super helpful, especially the info about S-Corp structure and partial unemployment. I've been paying myself as an employee with proper payroll taxes, so it sounds like I might have a shot. The documentation requirements sound intense but honestly at this point I'm willing to jump through whatever hoops necessary. Has anyone had experience with restaurant/food service businesses specifically? I'm wondering if there are any additional considerations for our industry given all the health regulations and licensing requirements. @Aisha Khan - definitely don't give up on 9 years of hard work! That's an incredible investment and hopefully UI can give you the breathing room to figure out next steps.

I went through this exact situation with my marketing consultancy in 2023. After 8 years of steady growth, I suddenly lost 3 major clients within a month and my income dropped by about 80%. I was terrified about applying for UI while still technically "running" my business. The best advice I can give you is to be 100% transparent with NYSDOL from the start. When I applied, I explained exactly what happened - how the business was still legally operating but generating almost no income, how I was actively job searching while trying to salvage what I could, and provided detailed financial records showing the dramatic revenue drop. What really helped my case was having quarterly tax payments that clearly showed the decline, and I made sure to track every single hour I spent on business activities vs. job search activities. I reported maybe 8-10 hours per week on average trying to keep the business alive while spending 25-30 hours job searching and interviewing. They did put me through additional review because of the self-employment situation, but I was eventually approved for partial benefits. It took about 5 weeks to get my first payment, but having that support allowed me to take the time to find a really good full-time position instead of just grabbing the first thing available. Your 9-year investment is worth fighting for, but don't let pride keep you from getting the support you've already paid into the system. Document everything and be honest - the worst they can do is say no, but you might be surprised by the support available.

I'm facing a very similar situation with my freelance design business - been running it for 5 years and January completely destroyed my client base. Reading through everyone's experiences here has been incredibly helpful, especially learning about the S-Corp vs sole proprietor distinctions and the importance of detailed documentation. One thing I wanted to add that might help others in similar situations: when I spoke to an accountant about potentially restructuring my business, they mentioned that if you're considering converting from sole proprietor to S-Corp for future protection, now might actually be a good time to do it while income is low. Obviously that's a longer-term strategy and won't help with immediate UI eligibility, but it could set you up better for any future economic downturns. @Aisha Khan - your situation with the S-Corp structure and proper tax payments sounds like it should definitely qualify for benefits. The fact that you've been paying into the system for years means you've earned this support. Don't feel guilty about using a safety net you've been contributing to - that's exactly what it's there for. The advice about using Claimyr to get through to an actual person also sounds like it could save a lot of frustration. Has anyone tried their service recently? The regular phone lines have been absolutely impossible to get through on.