Unreported Income While Collecting Unemployment

[Sureal]

My question involves unemployment benefits for the state of: California

I am not sure how to proceed with this. My hubby is unemployed and over the past month or two has worked a couple hours here and there for a company while still collecting unemployment. I found out he hadn't reported this to the state.

As of now he made a total of 880 bucks (in which taxes where withdrawn) totaling 44 hours or so(perhaps less)... working for this company. We want to report it but are not sure how to proceed. Especially because reporting it all at once would not be truthful either. Since he is still unemployed we don't want to end UI but we want to set matters straight.

So what should we do? Or how should we go about doing this? Report it all at once? Or Send a letter along with each date in which we rec'd perhaps 100 bucks, the next 200 hundred, the next 60? Hold our breath and start reporting as of now and last week (it would equal 360 of the 880)?

Are we in big trouble?

[PattyPA]

It's fraud. He should come clean, however, and advise the earnings BY WEEK. I honestly don't know how CA handles these, but the longer it goes on, the worse it will be if the state founds out.

Was he paid as an employee or as an independent contractor?

[Chelebelle321]

The longer he goes on collecting UI without reporting, the more he will have to pay back. As Patty said, this is considered fraud. You're not in BIG trouble- just moderate trouble. The unemployment will have to be paid back, with a penalty (I think it can go as high as 30%) and he just might be disqualified from receiving benefits for a time. There is room on the claim form to claim as much as $999 I believe. What that will do is stop your unemployment. If taxes were taken out, then he was most likely an employee and the EDD WILL find out.....sooner or later. Best to bite the bullet now and get it over with.

[PattyPA]

Just noticed something. You say taxes were withheld from these random earnings. So here's what is going to happen.

Once the quarterly wage reports get processed by the state of earnings for the calendar quarter, they run a compare program. Any individual who has received UI in the quarter and who also has wages in the quarter, gets flagged as a possible problem. The state sends a form to the employer listing each week in that quarter for which the person was paid UI benefits. The employer must indicate how much, if any, wages were earned in those weeks and return the form.

So, eventually, it WILL be discovered, no doubt about it. May take a while. If these wages were earned in the 3rd calendar quarter of 2010, the quarterly wage reports aren't even due until October 31. Processing through all these steps would take at least another 2-3 months after that. He very well could get a payback demand just about Christmas. Don't want that.

[CourtClerk]

I honestly don't know how CA handles these,

I actually know someone that was criminally prosecuted....

no urban legend, I know him and was sitting there in the courtroom when it happened. Shocked the mess out of me and probably wouldn't have believed it if (1) I didn't see it with my own 2 eyes and (2) he didn't have the house arrest bracelet to prove it.

[Cachicambo]

You want to report this NOW and not wait till EDD comes to ask you about it. I suggest that you find out exactly when the work was done and how much he earned per week and report it before deductions. He will get scheduled for a telephone interview where they will ask him about the earnings and also as to why he did not report this. In the mean time, I suggest he try to come up with some plausible explanation as to why he did not report the earnings when on the forms they send it clearly asks if he worked or had any earnings wether he was paid or not. Tell him to save any excuse that sounds like, I didn't know I had to, I didn't know how to or I didn't know I had to report part time work. He was given instructions as to how to report any income and that excuse will just make him come across as insulting to the interviewer's intelligence or a liar. The EDD will require that he repay all the benefits for the weeks in question for which he was over paid, may establish a 30% penalty and will no doubt assess a false statement penalty, if he reports it before they question him about it though, the penalty will be shorter. The false statement penalty, depending on if it's 2 or 10 weeks or whatever number means he will have to submit the claim forms for that number of weeks and meet all the criteria but will not receive any UI benefits for each of those weeks until he has served them all off. They will also want to know the name, address and last day he worked for the employer in question and why he is not currently working for them. If he was a contractor or a 1099 employee that opens up another can of worms.