Best Ways To Make Money Self Employed

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The benefits of self-employment are numerous. You maintain a large degree of independence in when, where and how you work. You have ample flexibility in whom you work with and in pursuing your own vision of success. You may not even have to commute.

But alongside all of the perks of working for yourself is — or traditionally has been — a consequential downside: Self-employed people, independent contractors, freelancers and gig workers have never had the protection of unemployment insurance benefits when they lose work or income. Until, that is, the United States government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020.

Under the CARES Act, states were given the option of providing unemployment benefits to self-employed people, including independent contractors, freelancers and gig workers, whose employment was impacted by the COVID-19 pandemic — and this decision shifted financial situations in some key ways. If you work for yourself, it's vital to learn about unemployment insurance for self-employed people in the United States, along with what the recent policy changes could mean for you.

Unemployment programs in the United States often refer to people who are self-employed, freelancers or gig workers as "independent contractors." But what is an independent contractor?

An independent contractor provides goods or services to someone else, but without doing so under the direction of an employer. Unlike employees, who work for another person's business, independent contractors have their own "business" and provide services to their own clients. The relationship between an independent contractor and the client to whom the contractor is providing goods or services is not an employment relationship; it's an independent contractor relationship.

There are countless types of jobs that fall into this category; freelance writers, delivery drivers, rideshare drivers (in many cases) and landscapers are all potential examples. But, generally, anyone who's working for themselves and doesn't have an employer dictating their work and how it'll be done can be classified as an independent contractor.

The lines between employment relationships and independent contractor relationships can certainly blur, however. They're different in some states and depend on whether you're dealing with tax, labor or benefits issues. But, ultimately, independent contractors — whether you call them self-employed people, freelancers, gig workers or contractors — are eligible for self-employed unemployment insurance under the CARES Act.

How Can Independent Contractors Qualify for Unemployment Insurance Benefits?

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Ordinarily, independent contractors weren't eligible to receive unemployment benefits because those benefits were designed for employees of businesses. That's because their employers pay taxes into the state and federal unemployment programs that provide these benefits — independent contractors don't fund these systems. However, the CARES Act — an economic stimulus bill that was designed to provide relief to people impacted financially by the COVID-19 pandemic — significantly expanded eligibility criteria to include independent contractors. The U.S. Department of Labor notes that independent contractors may now be eligible for unemployment insurance benefits:

If they're unemployed, partially unemployed, or unable or unavailable to work because of the COVID-19 pandemic
If they don't qualify for normal unemployment benefits (you can't get both regular and self-employed unemployment insurance benefits)
If they're dealing with certain health or economic consequences from the pandemic
If they live in certain areas, as different states handle the CARES Act's provisions differently

What could you be entitled to? Here more details from the Department of Labor: "The PUA [Pandemic Unemployment Assistance] program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after January 27, 2020, and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state's unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act."

This information refers to a December 31, 2020, cutoff. Many provisions of the CARES legislation were continued beyond December 31, 2020, but with changes and new language that described them.

To learn how to apply for unemployment benefits in your state and get information about exactly which benefits you may be entitled to, visit the CareerOneStop website, which is sponsored by the Department of Labor. Be sure to look up specific information that matches your location and circumstances. The filing process can be complex and detailed, so it's important to follow each step precisely.

What You'll Need to File for Unemployment Benefits

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As mentioned, some states require different specific pieces of information, but there are some basics that you'll need to get the process started just about everywhere:

Your name, phone number and full mailing address
Your driver's license number or state identification number
Your Social Security number or Alien Registration number
Proof of income, including documents like 1099 tax forms, W-2 tax forms, pay stubs, income tax returns, bank statements or record books
Your bank account number and routing number if you live in a state where unemployment insurance benefits are paid by direct deposit

As a general rule, you should file a claim for unemployment benefits in the state where you worked. If you're in an unusual situation in which you worked in a state other than where you live or if you worked in several different states, contact the state unemployment insurance office where you currently live to determine the state where you should file your claim.

Are There Other Pandemic-Related Benefits Available for Self-Employed People?

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Here's the short answer: Yes. A medium-sized answer follows, but the longest and fullest answer with all the details and information you need is one you should examine with help from the labor department in the state where you live. Whether or not you're eligible for any of these benefits will depend on your personal circumstances and your ability to provide the information necessary to substantiate your claim.

The Paycheck Protection Program (PPP)

You may be a self-employed person who doesn't work for anyone else, but you may also be an employer of other people. Independent contractors who employ other people may be entitled to participate in the PPP, a program of the United States Small Business Administration designed to encourage people to keep their workers employed during the pandemic.

The Self-Employment Assistance Program (SEAP)

The Department of Labor's Employment & Training Administration has developed SEAP, a program intended to help employees who have lost their jobs to create their own jobs by starting businesses. If you were an employee but have been or are trying to develop your own business (meaning you'll eventually be self-employed, a freelancer or an independent contractor), you may be eligible for a self-employment assistance allowance instead of regular unemployment insurance benefits. There's an important thing to keep in mind, though: SEAP is a voluntary program that states can participate in, but not all states do. To find out whether your state offers SEAP, visit CareerOneStop's Unemployment Benefits Finder.

In many ways, the COVID-19 pandemic has introduced unprecedented stresses into the U.S. economy and the personal financial circumstances of millions of residents, including people who are self-employed. In response to those challenges, governments have introduced unprecedented forms of support, even for independent contractors. Try not to assume anything about your entitlements, but do look at the specifics of your state and needs carefully.

Best Ways To Make Money Self Employed

Source: https://www.askmoney.com/insurance/unemployment-insurance-self-employed-workers?utm_content=params%3Ao%3D1465803%26ad%3DdirN%26qo%3DserpIndex

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