Legal Question in Employment Law in California

Recieving unemployment benefits while freelancing

I have a 3 part question:

If one is laid off from full time employment and then

files for unemployment benefits is it possible to do

freelance/contract work (1099) and continue to recieve

the unemployment benefits after reductions for wages

earned?

If the above scenario is legitimate, can one use their

1099 status to deduct expenses generated from

perfroming freelance work?

What would the outcome be of setting up a small

business in the above scenario, as opposed to an

performing work as an independant contractor?


Asked on 4/22/02, 10:13 pm

1 Answer from Attorneys
Michael Kirschbaum Law Offices of Michael R. Kirschbaum

Re: Recieving unemployment benefits while freelancing

California unemployment law requires those who receive unemployment benefits to report all income, even from self-employment. Failure to do so could result in serious legal ramifications. If the income is minimal it may not eliminate your benefits but it will reduce them.

Generally, business related expenses for contract work is tax deductible. It is best to work with a tax consultant or business planner to explore the pros and cons of being self-employed.

Read more
Answered on 4/24/02, 12:29 pm


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