S Corp unemployment

[CYN]

I have an Illinois S Corp client who is the sole partner and only employee. She runs a retail shop in a tourist area and really only works about 6 months a year. She pays
unemployment tax and is wondering if she can file an unemployment claim on herself.
Thanks,
Cynthia

[dsi]

Great question Cynthia. Hopefully somebody will have an answer for you . I also have an S-corp client with only one Shareholder who asked me the same question.

[JohnH]

It may depend upon the state, but

Here in NC I inherited a client several years ago who was the sole employee for his HVAC contracting business. As he got older & less willing to work outside in the cold, for several years he would submit unusually high bids for projects during the winter months and business would naturally dry up. He would file for unemployment comp and collect it for 2-4 months and then go back to work when business miraculously picked back up (as in, when he began to submit bids that were reasonable during the milder weather months).

His unemployment rate went sky high, but he felt that on balance it was worth it. Maybe so, provided he didn't hire any employees because he wouild have paid the sky-high rate on their wages as well. Anyhow, when he sold the business he had to discount the price because the purchaser didn't want to inherit the high rate as a successor employer.

All things considered, I'm betting it was a wash at best.

[Bees Knees]

In Minnesota, you can't draw unemployment on your own business. Yet for years, Minnesota required the owner/employee to pay unemployment tax on his/her own wages. Then a few years back, Minnesota allowed shareholders to elect out of paying unemployment tax. That seemed fair. Except for one problem. If you have no other employees, and you elect out of paying state unemployment tax, the Federal rate jumps from 0.8% to 6.2%, which is generally much higher than if he/she just kept paying Minnesota unemployment tax.

[BOB W]

In NY you must be AVAILABLE for work, any work. If a NY business is in business, work or not, he/she cannot collect UI. I have heard in some situation where partial UI is paid but have never seen it happen.

[oceanlovin'ea]

Same question

I just had one of my s corp ask me that same question.

Strange they all think alike at the same time.

Linda F

[TaxmannEA]

I had a sole-owner C-Corp in Illinois who had a seasonal business that usually dried up during the winter months. The owner always drew unemployment for the 2 to 3 months of inactivity with no problems other than a high contribution rate.

[BOB W]

I had a sole-owner C-Corp in Illinois who had a seasonal business that usually dried up during the winter months. The owner always drew unemployment for the 2 to 3 months of inactivity with no problems other than a high contribution rate.

One needs to be careful as to what the employee admitted to, like forgot to tell the interviewer he was also the owner of the business....???????

[Jiggers]

Corp shareholder/employee Unemployment

Here in Texas, they are required to pay into the state unemployment tax fund. However, trying to draw unemployment is another matter.

You basically have to shut the corporation down and dissolve it.

[Black Bart]

Self (Un)employment

My insurance guy has an S corporation and does this. He prepares his own income and payroll taxes (makes perfect sense to me -- if you can read an insurance policy, then taxes should be a snap). He drew a lot of unemployment benefits and they raised his rate, so he asked me about it.

Insurance Agent: "These blankety-blank $#*@$%#s are bleeding me white. They've raised my rate from 3.6% to 6.8%. If they're gonna be like that about it, then I'm (speaking seriously) layin' myself off again."
BB: "They'll probably raise your rate again."
IA: "Well, what can I do about that?"
BB: "Hmm; this calls for a plan. Okay, wait, I've got it; as soon as you get a notice that you have applied for benefits, then (speaking humorously) simply protest yourself. Send in a written explanation and demand that your benefits be denied. With any luck, your improper claim will be rejected."

[JohnH]

He should understand

Of all people, an insurance agent should understand the concept of collecting premiums indefinitely and then punishing the customer by raising the rate if there's ever a claim filed. His industry perfected the concept.

[Black Bart]

John, I'm not 100% sure but

...agent should understand the concept...

I think somebody told me that peckerwood was from (yuk-yuk) North Carolina.

(I would have put a smiley face after that, but I don't know how).

[DTS]

Bb

Bart,

Smiley face : ) however, no spaces between them.

Dennis

[JohnH]

He can't be from North Carolina

No way he's from North Carolina.
You reported his having said "I'm (speaking seriously) layin' myself off again."

If he was from North Carolina he'd have said "I'm fixin' to lay myself off again"

[Black Bart]

Touche!

If he was from North Carolina he'd have said "I'm fixin' to lay myself off again"

You're absolutely right, John. And that's what people (including me) say here (I'm fixin' to give you an example).

I once worked at a car dealership here in Arkansas and we had not paid a Chicago company's bill. Their A/R man called about it and our clerk said "I'm fixin' to send you a check." He asked her "Would you mind repeating that?" She wondered why. He replied he'd lived up there for 20 years, but was originally from Arkansas and hadn't heard that expression in all that time. He said it made him terribly homesick.

(Thanks, Dennis).

P.S. Also, the "you" is frequently pronounced "ye" (as in "Sorry I missed ye call."), although such usage is fading among the younger set.

P.P.S. I'm a big fan of the regional patois. Got any more NC examples?