When your business has S Corporation status, it typically means that it's a small business that has relatively few shareholders and may pay employment taxes such as unemployment and Social Security tax. If that business is struggling or just in its infancy, its owners may work other jobs in order to meet their financial needs. If you lose that other job and need to draw unemployment, you may have a chance at getting benefits, though each state is different and may disqualify you for various reasons. The best way to find out whether you'll receive benefits is to apply for them; after all, you'll never get an answer if you don't ask.
Visit the website of your state's employment department and read over the instructions for applying for unemployment benefits. Also check its "Frequently Asked Questions" page to get more information about qualifying for unemployment. In most states, you're required to work at the job for a minimum number of hours in the past year and to have left the job through no fault of your own in order to get benefits.
Gather the documentation you need to apply for benefits, including your recent pay stubs from the jobs you've worked. The employment department may also want to see income statements or pay stubs from your work with your S corporation as well, since the amount of employment benefits you receive is often determined by how much income you're currently receiving. After gathering the necessary documents, complete the unemployment application and turn it in to your state's employment department.
Start looking for jobs as soon as you stop working for the employer that let you go. To receive benefits, you typically have to be looking for work and available and ready for work as it becomes available.
Answer any questions fully and honestly when you have a benefits review interview with your state's employment department. Give the reviewer all the facts she'll need to know to make a decision on your claim. Following the interview, the reviewer will likely contact the employer for whom you worked to verify that you worked there and that you were let go through no fault of your own. If you meet the eligibility requirements, you may receive benefits, but, as an S corporation owner, you may also be required to participate in business development courses or take part in other training programs to help you start earning more income from your business.
Continue to report any income you're receiving from your S corporation, should you be given unemployment benefits. Not reporting this income could get you into trouble or result in a denial of benefits in the future.
Items you will need
- Pay stubs
- Business income reports
- States typically have a "waiting week" following termination from a job, so you'll likely need to wait 1 week before applying for unemployment benefits.
- Virginia Employment Commission: FAQ's - Employer Services - Business Owners Filing for Unemployment Compensation
- Washington State Employment Security Department: Employment Security Department: Frequently Asked Questions - July 7, 2013
- CNN Money: Firing Yourself: Unemployment Benefits for Business Owners
- Internal Revenue Service: S Corporations
- Photodisc/Photodisc/Getty Images
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