1099 earnings and unemployment in Massachusetts

[smaro436]

Hi,

Here's my question. I have been told that contract work that generates a 1099 does not have to be claimed as earning while collecting unemployment.

Is this true. Can I collect my unemployment benefits and do contract work and not have to report it as earnings? Does DUA only consider earnings that produce a W2?

I get so much conflicting info and it is very difficult to get through to DUA.

Thanks I look forward to your reply.

Regards,
Shirley

 

[Patricia_Young]

No, that is wrong, wrong, wrong.

 

[smaro436]

OK, I guess you told me! So what is right, right, right?

Do you know Massachusetts unemployment law?

 

[cbg]

I do. And it might be true, in some circumstances.

When you asked the DUA this, what did they say?

 

[smaro436]

I can't get through to DUA that's why I've resorted to asking here.

Like I said I hear conflicting reports. I do know if you work part-time and your are still not employed full time by the end of your benefit year, they will recalculate your benefit based on the part time earnings. I know someone that got their benefit reduced to only $80 a week.

 

[Patricia_Young]

So why do you think you don't have to?

 

[army judge]

You may supplement your UI benefits with part-time work if you continue to conduct an active work search and you report your earnings to DUA.

Earnings are payments in any form for any work or service you perform, including self-employment. Even if you have not been paid for this work when you are signing for your benefits, you must report the amount you earned during the week for which you are signing.

DUA will adjust your benefits according to a formula set by law. You are allowed to earn up to 1/3 (one-third) of your weekly benefit rate (not including dependency allowance) each week before deductions are made from your benefit check.

Example:
If your weekly benefit rate is $270 a week, you can earn $90 a week without deductions from your UI benefits. If you earned $120 a week, $90 would be disregarded and $30 would be deducted from your UI check. You would receive $240 in benefits, plus any dependency allowances.

Any earnings in excess of 1/3rd of the weekly benefit amount are deducted from the benefit amount until the benefit amount is reduced to $0. Any claimant who works 30 or more hours in any given week is considered employed "full time" regardless of earnings and is not eligible for UI benefits for that week.

All remuneration from part-time earnings should be reported for the week when earned, NOT the week when paid (i.e. the week in which the work was performed, NOT the week when the payment for the work was received). This is particularly problematic when dealing with commission payments; however the existing law does not provide any exceptions. In essence, when a claimant becomes aware of how much s/he earned for a week previously claimed on UI, s/he should contact the DUA Call Center and report the earnings. If the work was performed prior to the individual becoming unemployed and filing a claim for UI, the earnings would not have to be reported.

Fraud Prevention

Protecting the integrity of the UI Trust Fund, into which employer contributions are deposited to pay for employees' benefits, is a responsibility DUA takes seriously.

Numerous actions are taken to prevent the fraudulent collecting of benefits. A comparison or "cross match" program comparing wage records from the Massachusetts Department of Revenue and the UI database is aimed at ensuring that claimants who work part-time while collecting unemployment insurance benefits report those earnings to DUA.

The Department of Revenue also provides DUA with a report of new workers added to employers' payrolls. This report is also matched against UI records to check that claimants who return to work do not continue to collect benefits. Remember: Eligibility for benefits ends on the day a claimant starts full-time work.

To prevent fraud, DUA also matches records with those of other state and federal agencies including the Social Security Administration, the state Department of Corrections, and others.

The DUA Fraud Hotline can be reached toll-free at 1-800-354-9927 to report claimants who are collecting benefits while working full-time and to report employers who are paying workers and not reporting wages.

http://www.mass.gov/?pageID=elwdter...=dua_weekly_claim_working_part_time&csid=Elwd

Will my benefits go down if I work part-time?

You are allowed to work part-time while you collect UI as long as you continue to look for a full-time job. Your benefit check will stay the same as long as your weekly part-time earnings are not more than one third of your weekly benefit. However, if you earn more than this, your benefits will go down. Your check will be reduced dollar-for-dollar for every dollar you earn over the one-third limit.

For example, if your weekly benefit is $300, you can earn up to $100 per week without having your benefit go down. However, if you earn $150 per week, your benefit check will go down by $50 and you will get $250 per week in UI benefits.

http://www.massresources.org/pages.cfm?contentID=38&pageID=17&subpages=yes&dynamicID=605

 

[smaro436]

I know all this. I was just inquiring about earnings that generate a 1099 form rather than the usual W2.

 

[cbg]

And I asked you a question, too.

 

[smaro436]

And I asked you a question, too.

and I answered you: I can't get through to DUA that's why I've resorted to asking here.

Like I said I hear conflicting reports. I do know if you work part-time and your are still not employed full time by the end of your benefit year, they will recalculate your benefit based on the part time earnings. I know someone that got their benefit reduced to only $80 a week.

 

[army judge]

and I answered you: I can't get through to DUA that's why I've resorted to asking here.

Like I said I hear conflicting reports. I do know if you work part-time and your are still not employed full time by the end of your benefit year, they will recalculate your benefit based on the part time earnings. I know someone that got their benefit reduced to only $80 a week.

If you have earnings, they must be reported.
If you fail to report your earnings, they will eventually discover it.
When they do, you'll be penalized.
If you do not report earnings, your UI will not stop right away.
But, once they receive the data from the person giving you the 1099, they'll penalize you.


Think of it this way:
If you get receive earnings as a W2 employee, that is reported to the IRS.
If you receive earnings via a 1099, that is also reported to the IRS.
Earnings derived via W2 or 1009 are still earnings.

You are required to report any earnings.
The state will decide if those earnings affect your UI payments.

 

[smaro436]

Thanks, That's what I was thinking too. But you know there is so much misinformation out there.

 

[cbg]

Let me offer a suggestion. I am also in MA and very familiar with the DUA system.

Don't even try to get through on the phone if you need to talk to them. There are walk-in centers all over MA. Go to one. If you time it right, you can be in and out in ten minutes. Even if you time it wrong and have to wait, they have job listings, information on training classes, computers where you can work on your resume, all kinds of things you can do while you're waiting, AND it can count as a job contact for your log if you use the time right.

Much, much less frustrating than hanging on the phone for hours.

 

[smaro436]

Yup, I know. I've been to the center a few times. The next time I'm there for a workshop I'll do that. I just thought someone would know here.

Thanks

 

[cbg]

And for the record, I have also been told, BY THE PERSON TAKING MY CLAIM, that 1099 income did not count.

 

[Patricia_Young]

And for the record, I have also been told, BY THE PERSON TAKING MY CLAIM, that 1099 income did not count.

All I can say to that is

 

[smaro436]

I second that sentiment!!!!!