Can a business owner collect unemployment benefits in Washington state?

Generally speaking, business owners can't collect UI benefits for their own unemployment since they don't pay unemployment taxes on their own wages. However, there are some exceptions depending on how your business was structured. If you were incorporated and paid yourself W-2 wages (not just 1099), you might have eligibility. You'd need to look at whether you paid into the unemployment system as an employee of your own corporation.

This is tricky territory and Washington ESD has specific rules about business ownership that can be confusing. I'd recommend calling them directly to discuss your specific situation rather than guessing.

wait what?? i thought anyone who worked could get unemployment if they lost their job

I was in a similar boat two years ago when my restaurant closed. Even though I was the owner, I had been paying myself regular wages through payroll and paying all the required taxes including unemployment insurance. Washington ESD approved my claim because I had qualifying wages as an employee of my own corporation.

The system is SO BROKEN for small business owners! We put everything into our businesses and when they fail through no fault of our own, we get NOTHING while employees get benefits. It's completely backwards!

Did you have any employees during the time you operated your business? If so, you might want to look into whether you elected to cover yourself under the unemployment insurance system when you set up your payroll.

Check your Social Security statement online - it should show if you had any W-2 wages reported. If you only have self-employment income showing, that's a pretty clear indication you won't qualify for regular UI benefits.

My brother went through this exact thing in 2023. He had to provide Washington ESD with tons of documentation about his business structure, tax filings, and wage records. Took forever but he eventually got approved because he had been treating himself as a W-2 employee.

I tried claiming UI when my photography business failed and got denied immediately. Turns out sole proprietors and single-member LLCs are basically out of luck unless they specifically elected coverage, which most people don't even know is an option.

The key distinction is between being self-employed vs being an employee of your own corporation. If you incorporated and paid yourself regular wages with proper tax withholdings, you might qualify. But if you were operating as sole prop or taking owner draws, probably not.

honestly the whole thing is confusing and Washington ESD doesn't make it any clearer on their website. I spent hours trying to figure this out for my situation and still wasn't sure

I'm dealing with something similar right now. My consulting firm is barely hanging on and I'm considering shutting down. This thread has been really helpful in understanding what to expect if I do have to close.

For what it's worth, even if you don't qualify for regular unemployment, you might still be eligible for other assistance programs depending on your income situation. Don't give up exploring all your options.

The bottom line is you need to file and let Washington ESD make the determination. Even if you think you might not qualify, sometimes there are wage records you forgot about or special circumstances that could help your case.

Just remember that if you do apply and get approved, you'll still need to meet all the regular requirements - job search activities, weekly claims, etc. Business owners sometimes think they can just collect benefits while trying to restart their business, but that's not how it works.

Thanks everyone for all the insights. I'm going to gather up my business records and try calling Washington ESD tomorrow to discuss my specific situation. Hopefully I can get through to someone knowledgeable.

I went through this exact situation with my marketing consultancy last year. The key factor was that I had elected unemployment coverage for myself when I first set up payroll for my employees. Even though I was the owner, because I was paying into the system as a "corporate officer" and receiving W-2 wages, Washington ESD approved my claim. It took about 4 weeks to get a determination, but they did approve it. The tricky part is that many business owners don't realize they need to make this election when they first start paying employees - it's not automatic. If you didn't elect coverage and were just taking owner distributions or 1099 payments to yourself, you're probably out of luck for regular UI benefits.