Mar

30

Want to start a business while collecting unemployment?

Recently, there’s been a lot of hoopla in the news about starting your own business. It has been advertised that now is the time to venture out on your own. I certainly agree with stepping off the beaten path, however, what you may not have been aware of may hurt you if you are dependant on your unemployment benefits. It appears that most states will discontinue your unemployment benefits, currently set at 33 weeks in New York City, if you legally start your own business.

When you legally form a business, whether or not it turns a profit, you are considered gainfully employed and ineligible to receive unemployment benefits. This also holds true of individuals who had side businesses while they were employed full-time and have recently become unemployed. The state believes that time spent preparing the business for operation, marketing the business and operating the business constitutes employment, even if no profit is made, and therefor disqualify you from receiving unemployment benefits.

In New York City, there is an exemption for individuals who are enrolled in the Self Employment Assistance Program (SEAP). Individuals enrolled in the program can continue to receive their unemployment benefits. Enrollment in the program is based on your State’s profiling system. The profiling system determines which individuals will run out of unemployment benefits. Those deemed to fit that profile can receive unemployment benefits while starting their own business.  The State must grant you a written exemption BEFORE you start your own business or you risk losing your benefits.

Whether you are gainfully employed or not, you should always crunch your numbers before embarking on any business venture. However, when you are unemployed numbers are even more important.  One of the most crucial questions to ask  yourself is, “Can I survive without unemployment benefits?” A negative answer does not necessarily mean that you should not venture out on your own, however, it does mean that you need to have an alternate source of income until your business begins to pull in a profit.

For more information on New York’s SEAP, click here, other states would have the information on their state’s websites.

About the Author

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Migdalia Rivera, also known as Ms. Latina in social media, is a single Latina mother of a teen, tween and 2 Australian Shepherds. When not blogging, or chasing after her energetic bunch, she connects influential bloggers with brands and PR agencies via her blogger network, Stiletto Media.

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