Does collecting unemployment affect your credit? Texas TWC claimants need to know

That's genuinely such a relief. I was picturing some kind of flag on my credit file and stressing myself out for nothing.

Agreed with all of this. Benefits are treated like income for tax purposes but they're invisible to the credit system entirely.

Worth adding that lenders might ask you about income sources when you apply for the car loan, and unemployment income counts as income for some lenders but not others, so just be prepared to explain your situation at that point.

My situation is pretty straightforward so I probably don't need to call, but bookmarked that for if something weird comes up with my claim.

Severance stuff is so confusing to me. My company gave me two weeks pay when they cut my hours but it wasn't really severance, it was more like a bonus for staying through a rough quarter. Did you end up having to report that too?

Anything that counts as wages paid instead of notice stops benefits during that period, and other severance types TWC reviews case by case. I reported mine just to be safe and waited for the determination letter.

Makes total sense when you frame it that way. I think I was confusing it with something else in my head.

People mix this up with Medicaid or food stamps sometimes, thinking any government program gets reported somewhere. None of them hit your credit.

The only government thing that can wreck your credit is if you have a federal student loan go into default or something similar, but yeah, benefits are completely separate.

Oh I did not think about taxes at all. How do I even set up withholding if I didn't do it at the beginning?

Log into UBS at https://apps.twc.texas.gov/UBS/security/logon.do and look for the tax withholding option in your account settings. You can usually update it there, or call the Tele-Center at 800-939-6631.

Texas doesn't have state income tax so you're only dealing with federal, which is a little less complicated than it is for people in other states. The 1099-G still comes no matter what.

How long does that gap usually last? I applied about two weeks ago.

Roughly four weeks from when you apply before the first payment arrives, and that first payment usually only covers one week. After that it's about every two weeks once you're submitting your payment requests on schedule.

TWC also holds your first payable week, which they call the waiting week. You don't actually lose it though, it pays out after you've been paid twice your weekly amount AND you either go back to work full time or run out of benefits. You can request it through UBS or Tele-Serv.

I did submit my first one already, the letter they sent had a date on it and I did it that day. Is that the right way to do it?

Exactly right, that's the date on the 'Instructions: Requesting Benefit Payments' letter. You got it.

I definitely missed my first payment request window and had to scramble to do it late. You can still file Thursday through Saturday if you miss the Sunday through Wednesday window, so it's not a total loss.

Mine is four per week according to the letter. I've been keeping a log in a spreadsheet, is that good enough if they ever ask?

A spreadsheet works fine as long as you're recording employer name, contact info, date, and type of activity. TWC can ask to see it at any time.

Also make sure you're registered on WorkInTexas.com if you haven't already. That's tied to your UBS account and TWC uses it to verify work search activity in some cases.

My plan is to be back working before I go apply for the loan so hopefully that won't even be an issue. But good to know just in case.

Even if you're back working by then, lenders look at the last couple months of bank statements, so if unemployment deposits show during that window they'll want to understand your income history. Nothing wrong with that, just be ready to explain.

TWC pays via U.S. Bank ReliaCard by default or direct deposit if you set it up. Either way those deposits show on statements so there's no hiding it, not that you'd need to.

That's basically my exact situation, so that's really encouraging to hear.

She said the most confusing part was figuring out how to report earnings correctly on the payment requests. The way it works is you report what you earned in the week you did the work, not when you actually got paid.

That tripped me up too. You round down to whole dollars and report gross earnings, not what hit your bank account after taxes.

How does an overpayment even happen if you're doing everything right?

Employer disputes are a common cause. Your old job might respond to TWC's notice with information that changes your eligibility, or there could be a miscalculation in your weekly benefit amount that gets corrected later. Sometimes it's just an administrative adjustment.

You can appeal an overpayment determination within 14 days of the date on the mailing. Worth doing if you think the amount is wrong or the reason doesn't make sense.

Right, and credit bureaus track your borrowing behavior with private lenders. The government benefit system has nothing to do with that infrastructure.

There are some programs where the government IS a lender, like student loans, and those do report. I think that's where the confusion comes from for a lot of people.

Actually I didn't know that, I assumed it was based on my current reduced earnings. So it uses my wages from before the cuts?

The base period is the first four of the last five completed calendar quarters before you filed, so yes, it looks back at your earlier full wages. The cuts that just happened might not even be in the base period depending on when they occurred.

Maximum you can collect is 26 times your weekly amount or 27 percent of all your base period wages, whichever is less. That sets a cap on total benefits for the whole benefit year.

Okay putting this whole thread on a sticky note on my monitor. This is exactly what I needed to hear.

The peace of mind from knowing this is real. My biggest fear when I filed last year was something like this showing up and messing up my mortgage application.

That's a surprisingly positive spin on it. Never thought about unemployment as income that could help a loan application.

It's not guaranteed, every lender has different policies. But it's not automatically a negative either, which I think surprises most people.

Credit unions tend to be more flexible about this than big banks in my experience. Worth shopping around when the time comes.

Good catch on that. The 'both conditions' part is what trips people up, they expect it to just appear after a couple payments.

Tele-Serv is option 2 then option 4 to request the waiting week payment. Worth knowing before you go back to work so you don't forget.

Do you report gig income as gross or net?

For regular employment it's gross. For self-employed and gig work you report net profit. That's the distinction TWC makes.

Even social media income and reselling for profit counts, which surprised me when I found out. Pretty much any money you made from working in that week goes on the payment request.

How did his appeal end up?

It took a while but eventually resolved in his favor. The key thing was he had documentation of everything and kept all his records.

The appeal timeline is worth knowing upfront. The first level is the Appeal Tribunal, then the Commission, then civil court if it goes that far. Most people stop at the first level.

Work search stuff is exactly the kind of thing I'd want to verify directly with TWC rather than guess at.

My county changed its requirement count a while back and I didn't realize until someone told me. Definitely a good thing to confirm.

Luckily I did file pretty quickly, but that's a good warning for others reading this.

TWC's system won't hold anything for you retroactively. The earlier you file, the more you protect.

Also worth remembering that you can still work part time and collect, as long as you report earnings correctly. A lot of people think filing means they can't pick up any hours at all and that's not true.

Okay that one I would have panicked about for sure. Good to file away.

Identity theft claims on unemployment became a lot more common and people did get confused about what to do when they got forms for claims they didn't file. Report it on TWC's fraud portal, never verify an account that isn't yours.

Claimyr actually helped my mom figure out the right steps when she got a 1099-G for a claim she didn't file. The TWC agent walked her through the fraud reporting process and confirmed her own account was clean. She'd been trying to get through for days on her own.