Unemployment for contractor/consultant/temp (employee, credit, consulting, collect)

[NotWonderWoman]

I am a contractor/consultant/temp employed by Consulting Firm X doing work for Major Corporation A.

I just realized that I don't have unemployment insurance taken out. It is an 18 month contract. I'm sure the contract will be renewed, but doesn't everyone always thing that? Like we're all going to keep our jobs forever.

Anyway, since I am at will and can be let go after the 18 months, can I still collect unemployment even though I haven't been paying into it? The Consulting Firm X who is handling my paychecks does take out Fed Tax, State Tax and Social Security.

Thanks for your help

[MSchemist80]

If you are a true 1099 worker you are considered self employed and not eligable for UI.

If you are misclassified as 1099 and are legally a w-2 worker (review the threads on 1099 misclassification and form ss-8) you need to file the appropriate paperwork with the IRS (form ss-8).

Also since you are not having your earnings witheld you need to file quarterly estimated taxes with the fed and state govt or you will be assessed penalties at tax filing.

[winkosmosis]

It sounds like you're misclassified-- If you were actually a contractor you wouldn't be concerned with unemployment because you wouldn't be "employed" to begin with.

You can file the forms for misclassification but the IRS will not do anything for years most likely.

[MSchemist80]

Correct when I filed I received a decission about 3 years later.

[NotWonderWoman]

I do have my Fed taxes, and state taxes and also social security taken out. So, since I'm a contractor, I can't get unemployment? I received a W2 at the end of last year...not a 1099

[gray horse]

You should be fine, as you are an employee of the company as a temp. You received a W-2, so you are an employee in terms of unemployment.

[babysladkaya]

So consulting firm X is your employer, and should be paying the UI for you, you have earned enough time credits and salary I presume to qualify for the benefits, the fact that you happen to be a consultant to company A does not render you a consultant in the IRS eyes, you received W-2, in fact, you were what's now called a leased employee, that is, X leased you to A.

[Rabrrita]

There are only THREE state where the employees pays a portion of unemployment insurance and in those three states, the amount is usually less than 10% of the total premiums paid. In the other Forty-Seven states, the employer pays 100% of the unemployment insurance. Even if your employer fails to pay the premiums, most state laws still allow you to collect and it’s the state that goes after the former employer.

So, my question is; if you are an employee and it’s your employer’s responsibility to pay unemployment tax/premiums, why are you worrying about it?

[NotWonderWoman]

I guess I don't consider myself an employee. But perhaps I am. I am on a job with an 18 month contract. If Major Corporation decides they don't want me anymore...then I want to make sure I am still covered. Hopefully the contract will get renewed when the time comes...but you never know.

I am in a very unique situation when Consulting Firm A and Major Corporation B are in one state (let's say Ohio). I moved to another state (let's say Hawaii, although I wish it was) and work remotely. The Consulting Firm Pays my Hawaii State taxes, (not Ohio).

[marilyn220]

Originally Posted by MSchemist80

Correct when I filed I received a decission about 3 years later.

What was your decision MSchemist?