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  1. #1
    Join Date
    Oct 2017
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    6

    Default Can You Work as an Independent Contractor Whle on UI Without Reporting Earnings

    My question involves labor and employment law for the state of: Texas

    I was laid off back in July and am currently on UI until I find a full time job or benefits run out. Aside from looking for work full time, I have started to drive for Lyft to cure some boredom. As I understand it, driving for Lyft is considered an independent contract job with a 1099 tax form. I did not want to commit fraud with UI by collecting pay at the same time, so I have chosen to not fill out any tax forms yet while I am working for Lyft. Doing so means I'm not getting paid yet, either. Lyft is fairly new in my area and doesn't result in much pay, maybe $30-40 per week - nothing to live off of, and definitely just doing it to feel like I'm doing "something".

    My plan is to not collect any pay until I either find a full time job, or my UI benefits run out - either way, I don't want to get paid from Lyft until I am no longer on unemployment because I don't want this to conflict with my benefits and don't want to commit fraud. By holding off on filling out my tax forms with Lyft, and the pay just accumulating week after week and choosing to not be paid until after unemployment is over - is this okay? Since I am not collecting income while on UI, I assume that this would not be a conflict of benefits. I've tried to search for answers but I can only find information regarding collecting 1099 pay while on UI, but nothing on holding off on pay until after UI runs out. Any ideas?

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Working 1099 but Not Paid Until After UI

    Yes. Give up the whole idea. Does the word, fraud, have any meaning for you?

  3. #3
    Join Date
    Oct 2017
    Posts
    6

    Default Re: Working 1099 but Not Paid Until After UI

    Quote Quoting cbg
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    Yes. Give up the whole idea. Does the word, fraud, have any meaning for you?
    Well, that's precisely my question. Is it considered fraud if I'm not collecting any income while on UI? If I didn't care about committing fraud, I wouldn't be searching for answers. I do not want to commit fraud.

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

    Default Re: Working 1099 but Not Paid Until After UI

    Total "conflict of benefits" -- the UI system in Texas runs on what income is EARNED that week, not what was paid to you that week or later. You should be reporting to UI each week what you are earning from Lyft even if Lyft never pays you at all. What you are doing is fraud like cbg says.

    Here it is directly from TWC: "If you work while requesting unemployment benefits, report hours worked and wages earned during the week that you performed the work even if you have not yet been paid. There are no exceptions to what TWC considers “work.” The workweek for reporting earnings begins on Sunday and ends on Saturday, regardless of your pay period." http://www.twc.state.tx.us/jobseeker...-work-earnings

  5. #5
    Join Date
    Oct 2017
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    6

    Default Re: Working 1099 but Not Paid Until After UI

    Quote Quoting hr for me
    View Post
    The UI system in Texas runs on what income is EARNED that week, not what was paid to you that week or later. You should be reporting to UI each week what you are earning from Lyft even if Lyft never pays you at all. What you are doing is fraud like cbg says.
    Okay, thank you for the clarification! Now that I know that, I will definitely file those tax forms and contact TWC regarding the income earned. I appreciate the information.

  6. #6
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Working 1099 but Not Paid Until After UI

    What tax forms are you even talking about? Independent contractors don’t fill out such forms with a customer/employer. You get paid straight up without deductions. It is your responsibility to pay your own taxes. I don’t know about Texas but the few I’m familiar with want quarterly payments.

  7. #7
    Join Date
    Oct 2017
    Posts
    6

    Default Re: Working 1099 but Not Paid Until After UI

    Quote Quoting jk
    View Post
    What tax forms are you even talking about? Independent contractors don’t fill out such forms with a customer/employer. You get paid straight up without deductions. It is your responsibility to pay your own taxes. I don’t know about Texas but the few I’m familiar with want quarterly payments.
    I believe the form on the Lyft website is the W-9 form. They show $0 earned so far because I haven't filled that out yet and they don't have any of my information to pay me, it's all just sitting there in the Lyft system until I fill that form out. They don't report anything until it reaches the $600 threshold, which won't happen as little as I'm doing with it.

  8. #8
    Join Date
    Jan 2015
    Posts
    1,142

    Default Re: Working 1099 but Not Paid Until After UI

    Report it and what you estimate to be paid in GROSS wages the week you work it. Forget this other stuff. They don't give a rats patootie when you actually get paid, they want to know if you did any work for which you were paid or WILL BE PAID in the Sunday through Saturday week you are filing for and reporting about each time you certify for a week of benefits.

    If you do not make much money (state specific what amount that is) it may not affect your claim at all. If you make over a certain state specific amount, your benefits will be adjusted accordingly. Any week that you report more than your weekly benefit amount, you get nothing, and you must reopen your claim the following week to begin drawing again. You do not lose that amount of your weekly unemployment that your check might be reduced by based on working part time and reporting income. It is simply not taken out of your total amount you have to draw, and is going to be tacked on to the back of your claim, so that you might end up drawing a reduced amount for 32 weeks instead of the whole amount each week for 26 weeks. It's a good thing, not a bad thing, to pick up piecemeal work like this and claimants are encouraged to do so. But for goodness sake, REPORT IT. Else a year or two down the road, or when your ex wife calls to turn you in, eventually, you'll end up talking to someone about unemployment fraud.

  9. #9
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Working 1099 but Not Paid Until After UI

    All a W9 is for is to provide the payer with your TIN so they can file information with the irs regarding payments to you. It isn’t really a “tax form”.

    There is a $600 threashold where they are required to send you a 1099. That doesn’t mean they can’t send one for lesser amounts.

    It is irrelevent as to yiur tax liability though. Income is income and YOU are required to report it no matter how much it is.

    the only information they need to pay you is your name.

  10. #10
    Join Date
    Oct 2017
    Posts
    6

    Default Re: Working 1099 but Not Paid Until After UI

    Thank you all for the information, I will definitely take care of that. As I said, I definitely did not want to fraud the system because they've been there for me in my time of need and I'm not trying to shortchange anyone. I merely did rides to cure some boredom and restlessness because I miss working, didn't really care about getting paid for it since it was hardly anything. As one poster stated, it probably won't even effect my weekly benefits as Texas allows 25% per week to be made in part time work before they start deducting from benefits - and I know I didn't make that much. I just wasn't sure if it was even necessary to go through all of that. Now that I know, though, I definitely will. Thanks again.

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