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Unemployment Benefits for Realtors
In difficult circumstances, extraordinary measures are required, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) has allocated $2 trillion to help the economy recover. This includes the $1,200 stimulus payment and the Pandemic Unemployment Assistance (PAU), which extends unemployment benefits to contractors and others who would not otherwise qualify.
Independent contractors and the self-employed make up the bulk of real estate agents. While these experts would not be eligible for unemployment compensation under normal circumstances, the CARES Act has changed that. The enormous stimulus package enacted in March contains provisions for a Pandemic Unemployment Assistance (PUA) program, which expands unemployment benefits and covers self-employed people. If their salary has been harmed by the COVID-19 epidemic or the shutdowns orders that arose from it, these professionals can now claim for unemployment under the new law, which can be either full or partial unemployment.
The CARES Act allows states to provide unemployment benefits to self-employed employees and independent contractors, but they are not compelled to do so. According to the Department of Labor, your eligibility to file for unemployment benefits is ultimately determined by your unique circumstances and how your state decides to administer the CARES Act.
Unfortunately, unemployment benefits have been an issue for agents and other nontraditional employees in some jurisdictions, including Florida and Nevada. States are delaying the implementation of PUA benefits due to the high amount of jobless petitions they are receiving.
The Caveat
Unemployment laws regarding real estate agents are not all cut and dry. For instance, realtors are not considered eligible for benefits under the unemployment program since they are 1099 independent contractors. W2 agents, who make up roughly 5% of real estate professionals, are eligible for unemployment benefits in their state.
There have been exceptions in the past, such as the federal government's 2020 CARES Act, which permitted 1099 independent contractors to temporarily collect unemployment benefits due to the COVID-19 outbreak. The availability of jobs and the policies governing them differ from state to state. Find your state's important departments for work-related information via the US Department of Labor's website.
These laws also vary depending on where the realtor operates. Each week, a growing number of Pandemic Unemployment Assistance (PUA) claims are paid to independent contractors in Florida, many of whom are from the real estate industry. In fact, according to the latest statistics, more than 160,000 independent contractors were collecting unemployment benefits, totaling roughly $123 million in PUA payments.
In each of these circumstances, you will not be able to access the PUA application until DEO has processed and declined your state benefits claim. If you live in Florida, access to the PUA application will show in the CONNECT system only after that.
If you operate a business or a brokerage and are thinking about applying for a CARES Act emergency business loan, you might want to hold off on filing for unemployment benefits since it could affect your ability to qualify for a federal emergency loan and vice versa.
Applying for Unemployment
Start at the state of Florida's unemployment website to apply for federal unemployment compensation payments. You may now apply for federal benefits through the state unemployment system, known as CONNECT. However, in order to get it, you must first apply for and be rejected state benefits.
If you apply for state assistance on or before April 4, you must complete the following steps: Return to CONNECT and reapply for state assistance. Wait for the Department of Economic Opportunity to refuse your state benefits. Check your CONNECT email for PUA instructions once you've been refused.
If you apply for state assistance after April 4, you must complete the following steps: Wait for the Department of Economic Opportunity to refuse your state benefits. In your CONNECT email, look for PUA instructions.
There are, of course, certain more conditions. You will not be eligible if you are able to telework for money. However, if you can only work part-time online, you could be eligible for partial unemployment.
So, as a real estate agent, are you entitled to unemployment benefits? While we'd want to declare that under these new parameters, the answer is almost certainly "yes," it all relies on where you work, where you live, and how you're regarded as a worker. In the end, it's up to your state to decide whether or not you qualify as an individual.
So, how much will you get compensated for your unemployment if you're a realtor? Because real estate brokers aren't usually paid a salary, it's difficult to tell how much you might qualify for. This figure is usually decided by your prior tax returns and what your state allows. Once this amount is calculated, you'll typically get an additional $600 per week for a maximum of 39 weeks under the Pandemic Unemployment Assistance (PAU) provisions. If you are not eligible or need more time to complete the application, the National Association of Realtors can help.
Unemployment as a 1099 Independent Contractor
In recent years, independent contractors' status and employee benefits have been a controversial subject in the United States. The absence of benefits, such as unemployment payments, prompted proponents of California's contentious AB 5 bill. The California Association of Realtors (CAR) and the National Association of Realtors (NAR) worked hard to ensure that real estate brokers were excluded from the statute, allowing them to work as independent contractors rather than employees.
In the past, the status of a real estate agent as an independent contractor has been a subject of conflict and lawsuits. That's because, unlike other self-employed contractors, realtors are not free to work for many brokers, putting them in the murky area between the common law definitions of employee and independent contractor.
Unemployment as a W2 Employee
If you pay yourself as a W2 employee, there is another conceivable exemption. If you are a single member of a real estate firm, which is an LLC created as an S Corp, you will pay yourself as a W2 employee, which includes all necessary taxes, and retain the remainder of the money in the company. You should also remember that you will have to pay federal and state unemployment taxes as an employee.
If you worked as a W2 employee for your company and were paid, you may be eligible for unemployment benefits, depending on your state. If you own more than 10% of your company, you may not be eligible for unemployment benefits in several states.
What about Brokers?
If you're a broker and your agents are self-employed, you and your firm may be eligible for unemployment benefits. If your agents are employees, you must submit this information because you are required to do so (and because you also likely pay unemployment tax). Brokers can also apply for other options such as the Economic Injury Disaster Loan (EIDL) or the Paycheck Protection Program (PPP) to keep their businesses viable and pay their contractors' wages, depending on personal preference and, of course, the required eligibility requirements.
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