Will 1099 contract work disqualify me from ESD benefits? Confused about earnings reporting

I've been through this! You can actually work as a 1099 contractor while on unemployment, but you MUST report ALL earnings for the week you worked (not when you get paid). ESD will deduct a portion of your earnings from your weekly benefit. If you earn more than your weekly benefit amount + $5, you won't receive benefits for that week, but you're still \

Ok that makes sense! So I could still get partial benefits in weeks where I don't make much from the contract work? Do you know how they calculate the deduction from my benefit amount?

its not dumb at all!! i was in same boat last yr. they take 75% of what u make from ur benefit. so if u make $100 in 1099 work they take $75 from ur weekly amount. theres also some $5 thing they add but i forget exactly how it works lol

This is completely WRONG information. ESD doesn't take 75%. They actually deduct dollar-for-dollar anything you earn over that $5 earnings disregard. Please don't spread misinformation about UI calculations - people could end up with serious overpayment issues following incorrect advice.

sry maybe i got confused with a differnt states system. my bad

The exact rule is: you can earn up to $5 with no deduction to your benefits. After that, ESD deducts dollar-for-dollar from your weekly benefit amount. Example: Your weekly benefit is $500. You do 1099 work and earn $205 that week. You report $205, and ESD pays you $300 for that week ($500 - ($205-$5) = $300).\n\nAnd no, 1099 work doesn't automatically disqualify you! You just need to be available for full-time work, actively looking for work (documenting 3 job search activities each week), and accurately reporting any earnings. The catch with 1099 work is making sure it doesn't prevent you from accepting full-time employment if offered.

Thank you for breaking down the math so clearly! This contract position would be very part-time and flexible, so I should still be available for full-time work. I'm definitely going to be super careful about reporting everything correctly.

Be aware you still need to do your job search requirements even with part-time 1099 work! I forgot to do this when I picked up some freelance gigs and got hit with a benefit disqualification. Had to appeal and it was a whole mess.

Oh that's good to know! I'll make sure to keep up with my 3 job search activities regardless.

When i was working a 1099 position last year while on benefits, I had the WORST time trying to get through to ESD to ask similar questions. Kept getting disconnected or waiting for hours. I finally used Claimyr (claimyr.com) to get connected to an actual ESD agent who explained everything to me clearly. They have a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3. Saved me tons of stress and probably kept me from making reporting mistakes.

i just checekd out that video. kinda cool! might try this next time im stuck on hold 4ever

One important thing to understand with 1099 work: ESD wants you to report earnings in the week you PERFORMED the work, not when you get paid. This is different from W-2 employment. Many contractors make this mistake and it can cause problems later.\n\nAlso, keep very detailed records of your hours worked and earnings by week. If your 1099 client pays you irregularly or in lump sums, you'll need to break this down by week when reporting to ESD. This will be essential if you're ever audited or have an adjudication issue later.\n\nLastly, remember that as a 1099 contractor, you're considered self-employed, which means you need to set aside money for taxes since they aren't automatically withheld.

That's really helpful, especially about reporting when I do the work vs. when I get paid. I'll definitely track everything by week to make sure I'm reporting correctly. The tax situation is another thing I need to figure out if I take this position.

Watch out for the

This is a good point. In 2025, ESD is being especially strict about the able and available requirement. They want to see that you're not turning down potential full-time work in favor of keeping partial unemployment benefits combined with part-time 1099 work. They've been conducting more eligibility reviews this year focusing on this exact issue.