Pua Proof of Income for Self-employed: Update (May 6): Part 2 of this essay provides further information on the CARES Act’s self-employment unemployment benefits.
Until today, self-employed people who lost their jobs were unable to receive unemployment compensation.
Self-employed people can now get unemployment benefits if their income has been impacted by the COVID-19 pandemic and its economic impact, according to the CARES Act, which was established by Congress in reaction to the pandemic and its economic impact.
Pua Proof of Income for Self-employed To Attorneys And Accountants List
This, on the other hand, is a very different circumstance. The unemployment systems in the states are overburdened, and the rules are unclear.
What must you do to be eligible for benefits? How much money are you going to get? These and other queries abound among self-employed people who are currently in need of assistance.
The most prominent heroes in the struggle to control COVID-19 and treat the sick are doctors, nurses, medical researchers, and public health professionals. The innumerable lawyers and accountants who put in long hours to make sense of all the new regulations and procedures in order to help their clients financially survive are among the underappreciated but vital workers.
Amanda Thibodeau, an attorney with Morse, a law firm in the Boston region, shares her thoughts in this piece. She is the firm’s go-to person for Massachusetts Unemployment Insurance, as well as general unemployment mechanics used in other states and the federal programme.
1. How busy has it been since the CARES Act was signed into law?
We’ve been swamped with calls from clients with a variety of coronavirus-related business inquiries, but mainly on employment-related matters.
Employers are confronted with a slew of new and unanticipated obstacles. Our group, in particular, has been tremendously busy providing advice on the federal government’s many new initiatives and keeping up with the federal guidance that has been issued on a near-daily basis.
2. What are the CARES Act’s unique provisions for self-employed people, independent contractors, and gig-economy employees in terms of unemployment insurance (UEI) benefits?
The Pandemic Unemployment Assistance (PUA) programme was established under the CARES Act to offer benefits to persons who would not normally qualify for standard unemployment insurance payments, such as self-employed, independent contractors, and gig-economy workers. While the PUA is administered by the states, it is funded by the federal government, including the expense of administration, and is governed by federal rules.
3. What does it mean to be self-employed, an independent contractor, or a member of the gig economy?
Claimants must be ineligible for ordinary unemployment compensation or extended benefits under state or federal law to be eligible for PUA, and they must also be ineligible for Pandemic Emergency Unemployment Compensation (PEUC).
Individuals who are self-employed, have insufficient work history, or who otherwise do not qualify for regular unemployment compensation or extended benefits under state or federal law or the PEUC are eligible for the PUA programme.
Individuals who earn a 1099-MISC for their labours are often not eligible for standard unemployment compensation under most state programmes, and hence may be eligible for PUA.
4. When you’re a contractor, what does it mean to be unemployed? It’s common for many contractors to have periods of little or no work followed by periods of intense activity.
In Unemployment Insurance Program Letter 16-20, the Department of Labor stated that even if you are not entirely unemployed, you will still be entitled under the PUA.
Gig workers may be eligible for payments under the PUA if they incur “a significant reduction in work as a direct result of COVID-19.” Because benefits are computed on a weekly basis, benefit amounts may vary from week to week, which is acceptable.
The eligibility requirements for PUA differ from those for ordinary unemployment benefits. The PUA requires you to self-certify that you are unemployed, partially unemployed, or unable or unavailable to work due to one of the COVID-19-related reasons.
such as being diagnosed with COVID-19 or caring for a family member who has been diagnosed with COVID-19, or you are unable to work due to a governmental quarantine order. Review the valid COVID-19-related reasons and be able to connect any work reduction to that cause.
5. How do state-by-state payments, benefit durations, and application processes differ?
Payment amounts, durations, and procedures vary per state, but they are all managed in accordance with federal criteria. Each eligible benefits programme has its own set of payouts, durations, and processes.
PUA benefits, for example, are limited to 39 weeks, but several states enable normal unemployment claimants to obtain benefits for up to 39 weeks under certain circumstances.
When you operate as a self-employed person, an independent contractor, or in the gig economy, you will receive:
PUA ($600 per week till July 31, 2020) plus a benefit amount determined by your state depending on your prior employment income in 2019.
6. Does it matter how much money you were making before you applied for UEI? Is it affecting your benefits?
Yes, in order to assess your eligibility and benefit amount for PUA, the state unemployment office will evaluate your 2019 income history and use a calculation.
Each state has its own eligibility standards and algorithms for determining your benefit amount for regular unemployment compensation. This identical formula is used to compute the amount of benefits earned under the PUA programme.
In general, each state calculates salaries over a set “base period” to determine the claimant’s average weekly income for employees who receive a W-2.
The amount of benefits is then calculated using this average weekly wage. Some states need an employee to have worked at the company for at least one year to be eligible, while others demand an income level from any number of employers to be eligible.
Claimants can only earn a certain amount of money per week in each state. The weekly benefit amount in Massachusetts is capped at $823 per week (or $42,796 per year).
The benefit amount earned under the PUA programme is computed using the same formula that your state uses to calculate benefits for laid-off employees, with the exception that the base period will be different. The base period under the PUA is always the calendar year 2019.
The additional $600 per week, made possible by the CARES Act’s Federal Pandemic Unemployment Compensation (FPUC) programme, is accessible to anybody who qualifies for unemployment benefits, including those covered by the PUA. The Department of Labor has stated that until July 31, 2020, everyone who qualifies for $1 in benefits is able to get the entire $600 per week.
7. How can I establish how much money I made if I don’t have a Form W-2 like ordinary employees? What methods does my state use to verify them?
Unlike conventional unemployment insurance benefits, an individual filing for PUA does not need to produce proof of employment or self-employment to qualify, and the self-certification process does not take into account the applicant’s primary source of income. When calculating PUA rewards, the PUA will use the “base period.”
The 2019 calendar year is used as the base period for PUA. For the calendar year 2019, you must provide income from all sources. The state then uses that base period to calculate the average weekly pay, and then employs a state-specific formula to calculate the benefits amount.
8. Is there a general application checklist to follow? Would you recommend this Massachusetts-based guide as a generic reference to use in other states?
Yes, because the PUA is a federal effort governed by the US Department of Labor (DOL), the application process should be quite comparable across states. The Massachusetts checklist of documents and the overall advice supplied by the Massachusetts Office of Employment Assistance would most likely suffice in any state for benefits based on federal laws.
9. Will I be eligible for retroactive UEI if my state system is unable to pay my benefits at the time of my application? What is the duration of the payments?
Yes, the federal government made it plain that benefits must be provided retroactively–especially given the time it took to get the new programmes up and running throughout state unemployment offices.
Anyone who was qualified on January 27, 2020, will get benefits retroactively, and those who were eligible on March 27, 2020, will be eligible for the $600 under the Federal Pandemic Unemployment Assistance (FPUA). The PUA is now capped at 39 weeks, and the only way to extend it is for Congress to vote to do so.
10. In some jurisdictions, there appears to be a two-step process in which you must first apply for UEI insurance and be refused before being eligible for Pandemic Unemployment Assistance. Why is it more difficult to apply for UEI if you are self-employed, an independent contractor, or operate in the gig economy?
These individuals are often not qualified for standard unemployment insurance programmes, and states were simply not equipped to handle the volume of claims that were received. The states looked to the federal government for advice on the programme, how to process these claims, and, most significantly, when federal financing to administer the PUA would become available.
During the COVID-19 pandemic, the US Department of Labor (DOL) has issued monthly advise to states on implementing PUA and other UEI concerns. On April 27, it issued instructions urging states to evaluate normal unemployment claims that had previously been denied to see if they were eligible under the PUA.
The Department of Labor also stated that refused claims may be converted to PUA claims provided the initial information submitted by the claimant is sufficient, including the required self-certification, thus PUA claimants may start to see the process smooth out a bit.
As this recent guideline indicates, implementation has been delayed, and states are still struggling with many questions about how to execute it.
11. Do you have any pointers on how to get through to the overburdened state unemployment offices?
Perseverance and sometimes a little luck are the keys to success. As you can expect, governmental offices are overburdened. Furthermore, according to Politico, “just 21 states have started paying out benefits to self-employed individuals and others not usually eligible” as of the end of April, according to the DOL.
The staffing levels in these offices are insufficient to manage the volume of claims being processed. Some governments have instituted new procedures to assist new claimants, but personnel are still overworked, working seven days a week to process as many applications as possible as quickly as possible.
The CARES Act authorised extra federal cash to assist states in hiring and staffing local offices, but they are still unable to meet demand. This, combined with the fact that many of these claimants have never dealt with unemployment benefits before and are inexperienced with the process, has resulted in the longer processing delays we’ve seen.
Amanda’s responses to the second series of questions are presented in Part 2 of this article. They cover topics such as whether and how much work you can do while collecting UEI. She also discusses the tax implications of obtaining UEI, as well as the impact of obtaining UEI on applying for other government crisis-aid programmes, such as a Paycheck Protection Program (PPP) loan or an Economic Injury Disaster Loan (EIDL).