Self-Employed Texans and the CARES Act

U.S. Department of Labor Fraud Alert

The U.S. Department of Labor has issued an unemployment insurance phishing fraud alertPDF.

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Self-employed/independent contractors- Do I qualify?

If you are self-employed, a contract worker or previously worked in a position that did not report wages, you may qualify for unemployment and can apply!

If you already applied TWC will determine if you qualify under the new stimulus bill and notify you by mail or electronic correspondence of your eligibility.

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How do I apply?

If you have not filed, please go online to ui.texasworkforce.org and file or if unable to file online then call us at 1-800-939-6631 to start the process. You will be notified you do not qualify for regular unemployment benefits and be enrolled in disaster unemployment benefits or Pandemic Unemployment Assistance.

During the application process, when UBS asks non-traditional workers the reason for their job separation, they should select “reduced hours.” If their reduced hours are a result of COVID-19, they should also select “COVID-19” under the disaster impact section. The system will then display questions they need to answer to complete their claim.

After completion, the system will first review the claim for regular unemployment insurance eligibility, which will result in a denial for regular unemployment benefits only. Subsequently, TWC will automatically enroll these applicants in PUA. The initial denial for unemployment insurance may cause confusion but does not affect the PUA eligibility.

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What is Pandemic Unemployment Assistance (PUA)?

This program provides up to 39 weeks of benefits and is available starting with weeks of unemployment beginning on or after January 27, 2020 and ending on or before December 31, 2020. This program covers individuals who are self-employed, seeking part-time employment, or whom otherwise would not qualify for regular UC or EB under state or federal law or Pandemic Emergency Unemployment Compensation (PEUC) under section 2107. Coverage also includes individuals who have exhausted all rights to regular UC or EB under state or federal law, or PEUC. The maximum amount of Texas unemployment insurance is 26 weeks. For people that qualify, the Pandemic Unemployment Assistance can extend benefits to a maximum of 39 weeks through December 31, 2020.

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Pandemic Unemployment Assistance (PUA) Payment Request Instructions

For Workers, Employees, or Contract Laborers

 

You must report the total amount of wages before deductions such as taxes. Report wages from all work (whether full-time, part-time, temporary, or contract work) in the week you performed the work, NOT when the earnings were paid. For example, if you worked during Week #1 but your employer paid you in Week #2, you must report the wages in Week #1, the week when the wages were earned.

 

You must actively search for full-time employment (unless exempt). If you are required to search for work, TWC will mail you a Work Search Notification letter listing the required minimum number of work search activities you must make each week and the Guidelines for a Productive Work Search. You must keep track of the number of work search activities you do each week.

 

For Self-Employed Individuals

 

You must report earnings and commissions before deductions such as operating expenses. Report your gross income in the week you receive the income, even if you performed the work in a prior week. For example, if you performed services in Week #1 but did not receive payment until Week #2, you must report the gross income in Week #2, the week when you were paid.

 

You must actively take steps each week to return to normal business activities. You must tell us how many hours per week you spend rebuilding your business. NOTE: If you take another job (whether full-time, part-time, temporary, or contract work), report your wages in the week you performed the work, NOT when the earnings were paid. For example, if you worked during Week #1 but your employer paid you in Week #2, you must report the wages in Week #1, the week when the wages were earned. If you do not plan to reopen your business, you must actively search for full-time employment and record your work search activities to remain eligible for benefits.

 

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Proof of Income Notice for Self-Employed, Independent Contractors (1099), and Gig Workers

If you worked for the entire year of 2019 as a self-employed worker, a 1099 independent contractor, or a gig worker, you do NOT need to provide the Texas Workforce Commission (TWC) with your 2019 IRS 1040 Schedule C, F or SE unless your net profit for 2019 exceeded $20,800. That is the minimum amount needed to increase your Pandemic Unemployment Assistance (PUA) weekly benefit amount (WBA).

You will continue to receive the $207 minimum Pandemic Unemployment Assistance (PUA) weekly benefit amount (WBA) if your net profit for 2019 was less than $20,800. Providing your income tax return is optional and will not affect your weekly benefit amount if your net profit was less.

If you worked as a 1099 independent contractor, do NOT send TWC your 1099 form. Your 1099 form will have no effect on your Pandemic Unemployment Assistance (PUA) weekly benefit amount (WBA).

If your net profit was more than $20,800 and you submit your IRS forms and schedules, TWC will recalculate your Pandemic Unemployment Assistance (PUA) weekly benefit amount (WBA) and notify you of the change. If your Pandemic Unemployment Assistance (PUA) weekly benefit amount (WBA) increases, TWC will pay the difference retroactively to the date your employment was affected by the COVID-19 pandemic.

If your net profit for tax year 2019 was $20,800 or more, you can submit your 2019 IRS 1040 Schedule C, F or SE by using our online UI Submission Upload portal (English) or UI Submission Upload portal (Spanish).

If unable to use the online portal you can submit the proof by fax or mail. Due to the heavy volume of mail, processing the proof received by fax or mail will be delayed.

  • Fax: (512) 936-3250
  • Mail:

    Texas Workforce Commission
    P.O. Box 149137
    Austin, TX 78714-9137

Note: Applicants who submit their tax information may not receive an immediate response. Please do not resubmit unless explicitly asked.

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Understanding Your Payments

Since benefits are paid out every two weeks, your deposit should be double your weekly benefit amount, plus $1,200. Your account will not show the additional $,1200 ($600 per week) until after you request payment.

Where does the $1,200 come from?

On March 29, 2020, the U.S. Congress passed the CARES Act which provides an additional $600 per week to unemployment claimants due to the impact of the COVID-19 virus. This additional $600 per week is automatically added to a qualified account for the weeks ending April 4, 2020 through July 25, 2020. Your weekly benefit amount will continue after July 25. 

My payment is higher than it should be? Do I need to send the money back?

Be sure to check your weekly benefit amount. Your payment should reflect double your weekly benefit amount + $1,200. Be sure to subtract tax withholdings if you elected to withhold. If your payments are more than you believe you should be receiving and you have factored in the additional $600 per week, please reach out to TWC.

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I have a full-time job which continue to pay me but I lost my part-time gig, contract or self-employed work. Do I qualify?

You may not qualify. Since you are receiving your full -time salary, you are technically employed and thus may make too much to qualify for these programs.

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Are UI benefits taxable?

Unemployment benefits are taxable. Individuals can sign up for withholding and the Texas Workforce Commission will deduct 10% for income tax withholding.

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