Washington ESD - can I collect unemployment if I start my own business?

Yes, you can start a business while collecting unemployment in Washington, but you need to be very careful about how you report it. The key is that you still have to be actively seeking full-time employment and available for work. When you file your weekly claims, you'll need to report any income from your business activities. Washington ESD will reduce your benefits dollar-for-dollar after the first $5 you earn each week.

I tried calling Washington ESD about this exact question last month and could never get through. The phone system is absolutely terrible. I must have tried 50+ times over two weeks.

The most important thing is being honest about your availability for work. If you're running a business full-time, you might not be considered 'available' for other employment. But if it's just side consulting while you're genuinely job searching, you should be fine as long as you report everything correctly.

wait can you really do this?? i thought starting a business would automatically disqualify you from unemployment

I've been doing freelance graphic design while on unemployment for the past month. What I learned is that Washington ESD considers you 'self-employed' once you start any business activity, even if it's minimal. You'll need to answer 'yes' to the self-employment question on your weekly claims and report all gross earnings. They don't care about your business expenses - only what you actually earned.

The tricky part is proving you're still actively job searching if your business starts taking off. Washington ESD might question whether you're truly available for work if you're earning significant income from your business. I'd recommend keeping detailed logs of your job applications and interviews.

whatever you do dont try to hide the business income thinking they wont find out. washington esd cross references with tax records and if they catch you not reporting income you could get hit with fraud charges and have to pay everything back plus penalties

I'm in a similar situation but with an online store instead of consulting. Been trying to get clarification from Washington ESD for weeks but their phone system is useless. Does anyone know if selling products online is treated the same as consulting services?

One thing to watch out for - if your business income gets high enough, you might not qualify for any unemployment benefits that week even if you're still technically unemployed from your main job. I think the threshold is around your weekly benefit amount plus $5.

Does anyone know how Washington ESD handles business licenses? Do I need to get a business license before I start reporting self-employment income, or can I start small without one?

this whole system is so complicated why cant they just make it simple to understand what you can and cant do while on unemployment

Just wanted to add - make sure you understand the difference between having your own business and being an independent contractor. If you're doing consulting work for specific clients, you might be considered an independent contractor rather than truly self-employed. The reporting is the same but the classification can matter for other things.

I started a small business while on unemployment last year and it actually helped me transition back to full-time work. The key is being upfront with Washington ESD about everything and not letting the business income replace your job search efforts.

Quick question - do I need to register my business with the state before I start earning income, or can I just report the income on my unemployment claims without formal registration?

Been trying to get through to Washington ESD for two weeks about this exact question. Their phone system hangs up on me every single time after being on hold for an hour+. This is ridiculous.

Final thought - document everything! Keep copies of all your weekly claim submissions, records of business income, job search activities, everything. If Washington ESD ever questions your claims later, you'll need proof of what you reported and when.

I went through this exact situation about 6 months ago when I started freelance writing while collecting unemployment. The most important things I learned: 1) You absolutely must report ALL income from your business activities, even if it's just $20 that week, 2) Keep meticulous records of both your business income AND your job search activities - I use a simple spreadsheet for both, 3) The $5 exemption only applies to the first $5 you earn each week, after that it's dollar-for-dollar reduction in benefits. I actually found that having some business income helped me feel more productive during my job search, and it eventually led to networking opportunities that helped me find my current full-time position. Just be completely transparent with Washington ESD and you'll be fine. Also, consider setting aside some money for taxes on your business income since they won't withhold anything like a regular employer would.