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  1. #1
    Join Date
    Jan 2013
    Posts
    3

    Default Will My Band Be Liable for UI Taxes if I Claim Musician Income

    My question involves unemployment benefits for the state of: California
    I was laid-off from my full-time retail job recently. I worked there 8 years and began collecting unemployment a few weeks ago. I have always been a part-time musician and receive money from that as well. I want to correctly claim this income by listing the amount earned and the employer as "The Band" however I am handling all of the finances of the band, so the band has been set up as a sole-proprietor with me as the owner. All the band income comes to me and I disperse it back out to the members (including me). My questions are: will I be seen as "self-employed" and benefits will cease? Also, will EDD now go after the band to contribute to UI funds through taxes? Even if "The Band" gets hit with a letter asking for UI funds, we show no profit (just money changing hands) so there will be no taxes?
    Thanks for any help given!

  2. #2
    Join Date
    Jan 2006
    Posts
    38,734

    Default Re: Will My Band Be Liable for UI Taxes if I Claim Musician Income

    stick around for someone more versed in this type of issue but I see a couple possible problems in your future.


    Even if "The Band" gets hit with a letter asking for UI funds, we show no profit (just money changing hands) so there will be no taxes?
    UI taxes are not based on a company's profit. The tax rate is based upon the the wages of the employees.

    http://www.edd.ca.gov/payroll_taxes/...urance_Tax.htm

    UI is paid by the employer. Tax-rated employers pay a percentage on the first $7,000 in wages paid to each employee in a calendar year. The UI rate schedule and amount of taxable wages are determined annually. New employers pay 3.4 percent (.034) for a period of two to three years. EDD notifies employers of their new rate each December. The maximum tax is $434 per employee per year. (Calculated at the highest UI tax rate of 6.2 percent x $7,000.)
    I also believe that being an owner of a business is problematic when it comes to UI.

  3. #3
    Join Date
    Jan 2013
    Posts
    3

    Default Re: Will My Band Be Liable for UI Taxes if I Claim Musician Income

    Does anyone have any suggestions? I don't know what's worse, not getting my UI benefits or claiming the part time work and getting taxes levied on the band.

  4. #4
    Join Date
    Sep 2010
    Posts
    19,259

    Default Re: Will My Band Be Liable for UI Taxes if I Claim Musician Income

    "The Band" is not likely your employer. You are most likely a partnership. "The band" is likely not responsible for paying UI nor do you accrue UI benefits from playing in it. You should however be claiming the income you get from your music (and depending on whether the band could be considered a business rather than a hobby, you might be liable for self employment tax).

    You should be reporting the self employment income to the unemployment people as you earn it. Not being anything approximating a regular job nor interfering with your availability or search for a full time job, the worst that is going to happen is that your benefits might be reduced slightly.

  5. #5
    Join Date
    Jan 2013
    Posts
    3

    Default Re: Will My Band Be Liable for UI Taxes if I Claim Musician Income

    Thank you, my intention is to report all income for sure. I just don't want any of the promoters, clubs, agents, or the band to get a letter (like our booking agent did) forcing them to contribute to UI by way of taxes. I found this encouraging article: http://www.achangeinthewind.com/2009...-benefits.html explaining to not include an employer or address, just write SELF EMPLOYED. I hope that it is still a valid solution even though it's from 2009.

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