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Eligibility, reporting earnings, deductible expenses…..
Can I receive unemployment benefits while working in self-employment?
You can be eligible for benefits for any week you meet all three of these requirements:
- You worked less than 32 hours in any combination of employment and self-employment, and earned less than your weekly benefit amount.
- You are also seeking a job as an employee, by making contacts with potential employers that week. Keep a record of your job contacts.
- You are willing to rearrange or quit self-employment activity if it interferes with seeking or accepting employment under the normal conditions of your usual occupation.
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Will self-employment earnings reduce my weekly benefits?
Yes. Even if you meet the above requirements for a week, your unemployment benefits are reduced by 55 percent of your net self-employment earnings for the week.
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When and how do I report self-employment earnings?
You report net self-employment income when you do the work, not when you are paid for it. For each week you request benefits, you must report your hours worked and net earnings generated by that work, regardless of when you will receive payment. Sometimes this requires estimating what your earnings are.
There is an exception for part-time real estate agents and crop or livestock farmers. They may report earnings in the week that a sale of property, crop, or livestock is closed, as there is no certain income until a property sells or a crop is safely harvested and finds a buyer.
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What expenses can I deduct to determine the net amount of earnings I must report?
When reporting self-employment earnings for a week, you can only deduct expenses that are unique to self-employment. You cannot deduct expenses that the average homeowner or average employee doing similar work would also incur. Some expenses that are tax deductible are not allowed as deductions for unemployment benefit purposes.
Examples of what you can deduct: (Keep dated receipts.)
materials, goods and services purchased for the self-employment
rented or purchased equipment needed for the self employment
a dedicated business phone line
advertising and web page creation
business postage
business mileage at the authorized IRS rate
Examples of what you usually cannot deduct:
a small office in the home, or part of your home mortgage
a computer and printer that get personal use
personal vehicle expense
personal utility, phone, and internet bills
continuing education and professional fees that an employee would also incur
anything that gets regular personal use
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How do I correct the amount of earnings I previously reported?
If you find that your self-employment earnings were higher or lower than you estimated for a week, or if you just made a mistake, call Customer Service and an adjustment will be made.
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