Can small business owners apply for unemployment benefits in Washington ESD?

Unfortunately, as a business owner you generally can't collect regular unemployment insurance in Washington. The system is designed for employees who lose their jobs through no fault of their own. Since you owned the business, Washington ESD considers you self-employed, not an employee.

wait thats not entirely true though. there might be some exceptions depending on how your business was structured. if you paid yourself w2 wages as an employee of your own corp you might qualify

I had a similar situation trying to figure out my eligibility after my consulting business dried up. Spent weeks trying to get through to Washington ESD to get a clear answer. Finally used Claimyr (claimyr.com) to actually reach an agent who could look at my specific case. They have this video demo that shows exactly how it works: https://youtu.be/7DieNd3C7zQ. Turns out I wasn't eligible but at least I got a definitive answer instead of guessing.

The key question is whether you elected coverage for yourself when you had employees. In Washington, business owners CAN choose to pay into unemployment insurance for themselves, but most don't because it's optional. Did you ever fill out any forms about covering yourself?

This is so frustrating! The system punishes people who try to create jobs and businesses. I've been paying unemployment taxes for my employees for 15 years and now that I need help I can't get anything??

You might want to look into other programs though. There could be small business assistance programs or retraining grants available. Washington State has various workforce development programs that might help you transition to employment or start a new business.

my brother went through this exact thing when his restaurant failed during covid. he was not eligible for regular unemployment but there were some special programs at the time. not sure if any of those are still running though

Just to be completely sure about your situation, you really should talk to Washington ESD directly. The rules can be complex and there might be some detail about your business structure that could affect eligibility. I'd recommend using that Claimyr service I mentioned earlier - it's honestly the only way I've found to actually reach a real person at Washington ESD without spending half your day on hold.

What about if you're actively looking for regular employment now? I thought there might be different rules if you're genuinely seeking a job as an employee rather than trying to restart your business.

I'm a tax preparer and see this question a lot. Most small business owners are shocked to learn they can't get unemployment. The only exception I've seen is when someone was paying themselves actual W2 wages and elected unemployment coverage, which is pretty rare.

Check if you paid Self-Employment Contributions Act (SECA) taxes instead of regular employment taxes. That's another clue that you were self-employed rather than an employee for unemployment purposes.

this whole thread is making me realize I should probably elect coverage for myself in my business just in case. how do you go about doing that in washington?

Don't give up completely on finding assistance though. Even if you can't get unemployment, there might be other safety net programs available. Food assistance, healthcare subsidies, maybe even some local small business support programs.

I hate to say it but you might want to consider filing anyway just to get an official determination. Sometimes there are exceptions or special circumstances that aren't obvious. At worst they deny you, at best you might qualify for something.

UPDATE: I actually found another thread where someone mentioned Claimyr helped them understand their eligibility as a business owner. Might be worth trying that route since they can connect you directly with Washington ESD agents who have access to your actual records.

One more thing to consider - if you do end up getting regular employment, make sure to file for unemployment immediately if you lose that job. You'll need to meet the wage requirements based on your new employment, not your old business.

Sorry you're going through this. Closing a business is hard enough without having to worry about financial support afterward. Hope you find some assistance through other programs even if unemployment doesn't work out.

I'm in a very similar situation - had to close my consulting business last year when my main client contract ended. Like others have mentioned, I ended up using Claimyr to get through to Washington ESD and confirm I wasn't eligible since I was taking distributions rather than W2 wages. What really helped me was connecting with my local WorkSource office - they have business transition workshops and helped me understand what retraining programs were available. Also check with your local SCORE chapter if you're considering starting something new. The transition is rough but there are more resources out there than you might think. Definitely get that official determination from ESD first though so you know exactly where you stand.