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Emma Wilson

How do business owners file for unemployment with Washington ESD - is it even possible?

I had to close my small retail business last month after 8 years and I'm wondering if I can file for unemployment benefits as a former business owner. I've been paying into the system through payroll taxes but I'm not sure if Washington ESD considers business owners eligible. Has anyone been through this process? I tried looking on the Washington ESD website but the information is confusing about self-employment vs business ownership.

Business owners can file for unemployment in Washington but it depends on how you were classified. If you paid yourself wages as an employee and had payroll taxes deducted, you might be eligible. The key is whether you were treated as a W-2 employee of your own corporation or if you were considered self-employed.

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I was incorporated as an LLC but I think I was paying myself as an employee with regular payroll. How do I prove this to Washington ESD?

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You'll need your wage statements and tax records showing the payroll deductions. Washington ESD will verify your wage history when you file your claim.

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I went through this exact situation 2 years ago when my restaurant failed. The process was nightmare trying to get through to someone at Washington ESD who understood business owner situations. Spent weeks calling and getting nowhere.

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That's what I'm worried about. Did you eventually get approved for benefits?

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Yeah but it took forever to get someone who knew what they were talking about. I ended up using Claimyr to get through to an actual agent who understood business owner claims.

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What's Claimyr? I've never heard of that.

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It's a service that helps you get through to Washington ESD agents when the phones are jammed. Check out claimyr.com - they have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works. Saved me hours of calling.

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wait so if you own the business you can still get unemployment?? I thought that was impossible

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Only if you were paying yourself wages as an employee. If you were just taking owner distributions or were classified as self-employed, then no.

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oh that makes sense I guess. seems complicated though

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The eligibility requirements for business owners are pretty specific in Washington. You need to have been paying unemployment insurance taxes on your wages, and you can't have substantial control over the business operations. Even if you owned the business, if you were a minority owner or had limited decision-making authority, you might qualify.

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I was the sole owner so I definitely had control. Does that automatically disqualify me?

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Not necessarily. Washington ESD looks at whether you were paying yourself wages subject to UI taxes. If you were, you might still qualify even as the owner.

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This is confusing as hell. Why can't Washington ESD just give clear answers about this stuff?

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I'm dealing with something similar right now actually. Filed my claim 3 weeks ago and it's been stuck in adjudication because they need to verify my employment status as a business owner. The wait is killing me financially.

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How did you file? Did you have any issues with the online system recognizing you as eligible?

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The online filing worked fine, it's just the review process that's taking forever. I submitted all my payroll records but they want additional documentation.

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That's exactly what happened to me. I used Claimyr to finally talk to someone who could expedite the review process.

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had my own construction company for 5 years and never thought about unemployment when i shut down. wish id known about this earlier

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You can still file a claim if it was recent. Washington ESD allows retroactive claims in some cases, especially for business closures.

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it was about 6 months ago. probably too late now right?

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Not necessarily. You should still try filing - the worst they can do is say no.

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Just to clarify for everyone - the main factors Washington ESD considers for business owner eligibility are: 1) Were you paying UI taxes on your wages? 2) Were you classified as an employee? 3) Do you have wage records? If yes to all three, you should be able to file.

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This is really helpful. I think I meet all three criteria. Should I just file online like a regular employee?

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Yes, file the same way. Just be prepared to provide additional documentation during the review process.

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THE SYSTEM IS RIGGED AGAINST SMALL BUSINESS OWNERS! They make it impossible to get benefits even when you've been paying in for years. I went through this nightmare and it took 8 weeks to get approved.

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8 weeks?? I can't wait that long for income. Did you have to do anything special to get approved?

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Had to provide every single piece of paperwork imaginable. Bank statements, tax returns, payroll records, incorporation docs, everything.

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That's what I'm afraid of. The documentation requirements seem endless.

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quick question - do you have to completely shut down the business to file or can you file if you're just reducing operations?

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You need to be involuntarily unemployed, so if you're still operating the business even at reduced capacity, you probably wouldn't qualify.

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got it, thanks for clarifying

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I was in the same boat last year. Filed as soon as I closed my consulting business. The trick is having all your documentation ready when you file because they WILL ask for it during adjudication.

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What specific documents did they ask for? I want to be prepared.

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Payroll records, quarterly tax filings, articles of incorporation, and bank statements showing wage payments to yourself.

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anyone know if llc owners are treated differently than corporation owners for unemployment purposes?

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The business structure matters less than how you classified yourself for payroll purposes. LLCs can elect to treat owners as employees for tax purposes.

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that makes sense. i think i was treating myself as an employee so i should be good

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This whole thread is making me realize I should have planned better before closing my business. Had no idea business owners could even apply for unemployment benefits.

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Same here! I wish there was more information available about this stuff.

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Right? You'd think Washington ESD would make this clearer on their website.

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Update on my situation - finally got through to someone at Washington ESD who said my claim should be approved within the next week. The key was getting all the right documentation uploaded to their system.

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That's great news! How did you finally get through to talk to someone?

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I ended up using that Claimyr service someone mentioned earlier. Worth every penny to avoid sitting on hold for hours.

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Told you Claimyr works! Glad it helped you too.

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been trying to call washington esd for 2 weeks about my business owner claim status. this is ridiculous

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Save yourself the headache and just use Claimyr. I'm telling you it's the only way to get through.

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is it expensive?

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Way cheaper than the time and frustration of trying to call yourself. Check out their video demo to see how it works.

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For what it's worth, I was denied initially as a business owner but won my appeal. Don't give up if you get denied on the first try.

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What was the reason for the initial denial?

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They said I had too much control over the business operations. The appeal hearing officer disagreed and approved my claim.

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this is all so confusing. why cant they just have a simple yes or no answer for business owners?

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Because every business situation is different. The law tries to distinguish between true employees and business owners who are essentially self-employed.

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i guess that makes sense but its still frustrating

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Thanks everyone for all the helpful information. I'm going to gather my payroll documents and file my claim this week. Fingers crossed it goes smoothly!

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Good luck! Make sure you have everything organized before you start the application.

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And remember Claimyr if you run into any issues reaching Washington ESD. Much easier than the regular phone system.

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Will definitely keep that in mind. Thanks for the recommendation!

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One thing to remember is that if you do get approved, you'll still need to do the weekly job search requirements just like any other claimant.

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Good point. I assume that means looking for employee positions, not starting another business?

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Exactly. You need to be actively seeking employment as an employee, not self-employment opportunities.

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my accountant told me business owners cant get unemployment but after reading this thread im wondering if she was wrong

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Many accountants don't fully understand the unemployment eligibility rules for business owners. It's a complex area of law.

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makes sense. probably worth looking into myself then

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Final thought - even if you think you might not qualify, it's worth filing anyway. The worst case is they deny you, but you might be surprised and get approved.

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That's good advice. Nothing to lose by trying.

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Agreed. I thought I wouldn't qualify but ended up getting benefits for 6 months while I looked for a regular job.

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