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  1. #1
    Join Date
    May 2017
    Posts
    1

    Default Can You Collect Unemployment While Performing 1099 Work

    My question involves independent contractors in the state of: NEW JERSEY

    Need advice. I am collecting NJ unemployment. From time to time I do therapeutic coaching and receive compensation from insurance companies as a 1099 contractor. However, when I submit forms for work I did, it can sometimes take months for me to receive compensation. So, if I do work within a week that, let's say, amounts to $ 300, I may not see that money for quite some time. It will be reported as earnings on my yearly income tax.

    My confusion is this...With unemployment, they say you have to report earnings received and it gets deducted from your weekly benefit. But, if I do some hourly work, but don't get paid within that week, but report it to unemployment- they will deduct from my benefit- but I have not received earnings. So, I collect less, but have not earned money elsewhere.

    I have spoken to NJ unemployment help line and they are useless. They are abrupt, angry and don't' understand the nature of the work I do and how I receive compensation.

    Can anyone offer some clarification. I wan't to avoid having any issues with unemployment and a possible scenario of paying back money.

    thank you.
    MDV

  2. #2
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Collecting Unemployment and Doing 1099 Work

    You might be confusing things with your terminology. You could try asking them what happens to occasional self employment work...specifically using the term "self employment". Then explain that you "invoice" the client and they have 30-45 days to pay. Ask them when you report the income. The week that you invoice it or the week that you receive it.

    For tax purposes an individual who is self employed is a cash basis taxpayer who does not report income until its received. Theoretically, in my opinion, it should be the same for UI purposes.

  3. #3
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Collecting Unemployment and Doing 1099 Work

    I don't think it's that they don't understand how it works for the type of compensation you are talking about - it's that you don't understand how unemployment works.

    Earnings get reported in the week they are earned - not the week they are paid. Period. It doesn't matter how you earned it or what kind of work it was. This is the rule. This is the rule in all 50 states. This is the rule regardless of whether it's convenient for you or not.

    Follow the rule and you won't have to pay anything back. Even if that means you get less of a benefit some weeks.

  4. #4
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Collecting Unemployment and Doing 1099 Work

    agree with cbg. when you call in/report each week, you must disclose anything earned that week, not paid that week. That's just the way the system works. Otherwise, there could be lots of scams and fraud going on where people defer earnings so they get the full UI amount each week and still have some work that they earned money for.

    I suggest trying to work with whoever you are getting 1099 income for about getting it in a more timely fashion (multiple months is pretty unacceptable) - that's one nice thing about being an employee as most states protect when an employee must receive wages due.

  5. #5
    Join Date
    Mar 2012
    Posts
    1,360

    Default Re: Collecting Unemployment and Doing 1099 Work

    Quote Quoting venussky59
    View Post
    don't' understand the nature of the work I do
    The UI workers understand it all right. In it's simplest terms the UI system provides an income until you get your next JOB. It starts to break down when you get jobS. You need to stop looking for this type of work and go find a job about as good or better than you had before.

    If you get labelled as someone that's "joined the ranks of the self employed," then you'll really have something to complain about when your $300 of earnings causes you to be denied access to your $600/wk UI claim with $15,000 still left in the pot.

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