Can small business owners get unemployment benefits in Washington state?

Generally, business owners can't get regular unemployment benefits because you weren't an employee paying into the UI system for yourself. However, there might be some exceptions depending on how your business was structured. Did you ever pay yourself a W-2 salary or were you strictly 1099/owner draws?

I was in a similar boat when my restaurant closed. The key is whether you were classified as an employee of your own business and paid unemployment taxes. Most small business owners are considered self-employed and don't qualify for traditional UI benefits.

You should definitely apply and let Washington ESD determine your eligibility. The worst they can say is no. I've seen cases where business owners qualified because they had complicated employment structures. Use claimyr.com if you need help getting through to an actual person at ESD - they have a system that helps you reach agents without waiting on hold forever. There's a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

The rules are pretty strict about this. If you were the owner and didn't elect to pay unemployment taxes on yourself, you're not eligible. Washington ESD has specific criteria and being self-employed usually disqualifies you from regular UI benefits.

wait i thought anyone could get unemployment if they lost their job? this is confusing

I went through this exact situation 2 years ago with my consulting business. Had to shut down and thought I could get unemployment. Spent weeks trying to figure it out and finally got through to someone at Washington ESD who explained that since I was 1099 the whole time, I didn't qualify. Really frustrating because I had been paying taxes but not unemployment taxes for myself.

One thing to consider - if you had employees and paid unemployment taxes as an employer, that doesn't automatically make YOU eligible as the owner. The system is set up for employer-employee relationships, not owner situations.

This whole system is so backwards. Small business owners take all the risk and when things go bad we get nothing while our employees get benefits. Makes no sense.

There might be some edge cases where business owners qualify. Like if you incorporated and paid yourself as a W-2 employee of your own corporation. The structure of your business matters a lot for these determinations.

The frustrating thing is how hard it is to get clear answers from Washington ESD about these situations. You call and either can't get through or get different answers from different people.

Just to be clear - you need to have worked as an employee and had unemployment taxes withheld from your paychecks to be eligible. Being a business owner who paid unemployment taxes FOR employees doesn't count. It's about what was paid on YOUR behalf as a worker.

so basically if youre self employed you get screwed when things go bad? thats messed up

One option is to apply anyway and see what happens. Washington ESD will review your work history and earnings to determine eligibility. If that one year you paid yourself a W-2 salary was recent enough and substantial enough, you might have a claim.

Another thing to consider is that even if you somehow qualified, your benefit amount would be based on that W-2 income, not your total business income. So it might be pretty low.

I used to work at a different state's unemployment office and saw this question a lot. The rules are pretty consistent - business owners typically don't qualify unless they specifically elected coverage or had significant W-2 income from their own business.

honestly just apply online and see what happens. if you dont qualify theyll tell you. if you do qualify you get benefits. no harm in trying

Good luck with the application! If you run into any issues or need to talk to someone at Washington ESD about your specific situation, that claimyr service I mentioned earlier really does help. Way better than sitting on hold for hours.

Update us on how it goes! I'm curious to know if that W-2 year makes a difference for your eligibility.

Really hoping it works out for you. The transition from business owner to looking for work is tough enough without having to worry about income.

One last thought - if you don't qualify for regular unemployment, you might want to look into other assistance programs while you're job hunting. Food assistance, utility help, that kind of thing.