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Unread 12-03-2012, 03:57 PM
 
1 posts, read 3,998 times
Reputation: 10
Default PA Unemployment W2 and 1099 Income

Hi everyone:

I am new to the forum. I was employed part-time during the 2012 year with a W2 from about January to May. I took a leave of absence for the summer and returned in August working full time with W2. Around September, my employer bumped my salary and switched me to a 1099 employee. This past week I was laid off due to economic slowdown. My employer is going to pay me a severance. Just based upon my math I earned over the 3000 and change threshold for unemployment in PA while on W2. My question is, will I be successful if I apply for unemployment without battling with my old employer? The employer paid into unemployment insurance during the time I was receiving a W2. Would I have to say that I was terminated in September when I stopped receiving the W2? Or would I have to say I was terminated in December. The online form doesn't give you much room to explain the situation and I don't want to file a false application. I feel I should be entitled to at least some unemployment compensation for paying into the system during a significant portion of the year. Any help anybody could offer would be greatly appreciated!
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Unread 12-03-2012, 05:52 PM
 
Location: Wisconsin
12,353 posts, read 14,345,139 times
Reputation: 5594
You are terminated in December. If you wait to file for benefits until January, PA will use earnings from October 2011- September 2012 to qualify you which should encompass all your W-2 wages from this employer. The 1099 wages are irrelevant at this point, as PA does not use an alternate base period except in cases of work-induced disability.

Eligibility

Just so you know, your deduction in PA for unemployment insurance is minuscule and probably won't cover one week's benefit. Employers pay the lion's share of the UI tax and that share can increase substantially depending on the employer's claim history. Which is one of the reasons your employer moved you to 1099. So, he probably won't be too happy you are filing for benefits but may expect it. He may contest. You deal with it when it happens.

FUTA Credit Reductions: Does Your Business Owe More in Taxes? | NFIB
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Unread 12-03-2012, 06:35 PM
 
Location: the Outer Limits
3,705 posts, read 2,347,714 times
Reputation: 3399
I agree, your employer probably wanted to cut his tax liability. But, there is always the fact that you were a w-2 employee and then, if he arbitrarily switched you to 1099, there may be a dispute with the IRS. If nothing changed and you were doing substantially the same job after being switched to subcontract....it may raise a flag with the IRS. I don't have any idea how it might effect PA unemployment viability. Good luck. You do know you will be paying the SS/med/FIT tax on the $3000 ?
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Unread 12-03-2012, 06:49 PM
 
Location: Wisconsin
12,353 posts, read 14,345,139 times
Reputation: 5594
Quote:
Originally Posted by AnnieA View Post
I agree, your employer probably wanted to cut his tax liability. But, there is always the fact that you were a w-2 employee and then, if he arbitrarily switched you to 1099, there may be a dispute with the IRS.
If employer has a dispute with anyone, it may be with the PA DOL. DOLs are cracking down on 1099 wages - common ploy used to circumvent payment of UI tax, among others.


Quote:
Originally Posted by AnnieA View Post
You do know you will be paying the SS/med/FIT tax on the $3000 ?
Those wages were W-2, so he has paid FICA on them.
Quote:
Originally Posted by mrpande View Post
Just based upon my math I earned over the 3000 and change threshold for unemployment in PA while on W2.

Last edited by Ariadne22; 12-03-2012 at 07:09 PM..
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Unread 01-17-2013, 06:04 AM
 
3 posts, read 3,700 times
Reputation: 10
i want my w2 from unemployment for 2012. show me the money! (1099-g)
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