Can S corp owner collect unemployment benefits in Washington state?

This is actually a really complex area. S corp owners who pay themselves W-2 wages can potentially qualify for UI benefits, but it depends on several factors. The key is whether you're considered an employee or an owner-operator. If you've been paying payroll taxes including unemployment tax on your salary, that's a good sign. You'll need to show that your work relationship meets the employee criteria.

I went through this exact situation last year! As an S corp owner, you CAN collect unemployment if you meet certain requirements. The main thing is that you need to have been paying yourself regular wages and withholding unemployment taxes. Since you mentioned paying yourself a salary for 18 months, you should be eligible.

Good luck getting through to Washington ESD to ask about this. I've been trying to reach them for weeks about my claim issues. The phone system is absolutely broken - I either get busy signals or get disconnected after holding for hours.

For S corp owners specifically, Washington ESD looks at these factors: 1) Do you receive W-2 wages? 2) Are unemployment taxes being paid on those wages? 3) Is there a clear employer-employee relationship despite ownership? 4) What percentage of the company do you own? If you own less than 50%, you're more likely to qualify.

Make sure you have all your documentation ready when you apply. You'll need your quarterly wage reports, proof of unemployment tax payments, and anything showing your employee status. Washington ESD will likely flag your claim for adjudication because of your ownership status.

This whole system is such a mess. Small business owners pay into unemployment insurance but then get treated like we're trying to scam the system when we need to use it. It's not our fault the economy tanked!

One thing to be careful about - if you're still doing any work for the S corp even without pay, that could affect your eligibility. You need to be completely separated from work activities to qualify for benefits.

Since you're having trouble reaching Washington ESD, definitely check out that Claimyr service I mentioned earlier. It's specifically designed to help people get through to ESD agents when you can't reach them normally. For something complex like S corp owner eligibility, you really need to talk to someone who knows the rules.

I work in accounting and see this situation come up occasionally. The key documentation you'll want is your Form 941s showing unemployment tax payments, your corporate bylaws or operating agreement, and evidence of your separation from work duties. Washington ESD will want to see a clear paper trail.

My brother went through this exact same thing with his S corp. He did get approved but it took forever and lots of documentation. The important thing is being completely honest on your application and having all your paperwork in order.

Don't let people scare you about this. If you've been paying unemployment taxes on your wages, you have every right to collect benefits when you're unemployed. The ownership thing makes it more complicated but not impossible.

Make sure when you apply that you select 'laid off' as your reason for unemployment, not 'quit' or anything else. Your business circumstances forced the layoff, you didn't choose to quit working.

Whatever you do, don't wait to apply. Even if there are complications with your claim, you want to get the application in as soon as possible. Benefits are retroactive to your application date, not when you're approved.

One more suggestion - when you do get through to Washington ESD (whether through normal calling or using that Claimyr thing), ask them specifically about RCW 50.04.380 which covers S corp officer eligibility. Having the statute number shows you've done your homework.

Just to add another perspective - even if your initial claim gets denied, you can appeal the decision. S corp owner cases sometimes get denied initially but approved on appeal once all the documentation is reviewed properly.

I'm in a similar situation with my LLC that I elected to tax as an S corp. I've been following this thread and it's really helpful to see all the different perspectives. From what I'm gathering, the key seems to be having that clear employee-employer relationship documented, even when you're the owner. Ali, have you considered reaching out to a local SCORE mentor or small business attorney? They might be able to help you prepare your documentation package before you apply. Also, I'd definitely recommend keeping detailed records of when you stopped all business activities - dates, emails to clients about closure, etc. That timeline could be crucial if they question your separation from work. Good luck with your application!

I went through this exact situation with my S corp about 6 months ago and successfully received benefits. Here's what I learned: First, apply immediately - don't wait any longer while you're gathering documentation. You can always submit additional paperwork during the review process. Second, make sure you have your corporate resolutions documenting the layoff/business closure. I had to draft a board resolution showing the decision to cease operations and lay off all employees (including myself). Third, be prepared for the adjudication interview - they'll ask detailed questions about your day-to-day role, how decisions were made, and whether you truly functioned as an employee despite ownership. The fact that you've been paying W-2 wages and unemployment taxes for 18 months puts you in a good position. Your 60% ownership will definitely be scrutinized, but it's not an automatic disqualification. They're looking for whether you had genuine employer-employee relationship characteristics like set hours, defined duties, and limited control over employment terms. Document everything and be completely transparent in your application. The process took about 7 weeks for me but I received full back pay once approved.