Will applying for a small business tax id number affect my unemployment?

Asked in Downingtown, PA , on Feb 8, 2012

I am currently collecting unemployment due to a seasonal layoff, I will be called back to work in the spring. I would like to start a small home-based baking business and require a tax id# for this. If I register this business, will it affect my unemployment?

Answered on Feb 13, 2012

That is probably not enough, but under todays circumstances where it is so difficult to get and stay on UC benefits, I would be careful with how far you go. If someone takes steps toward self employment after they started received unemployment, such as by renting a building etc, they could become disqualified from receiving unemployment benefits. 43 P.S. 802 (2010); Voltz v. Commonwealth, 476 A.2d 492 (Pa. Commw. 1984).

Moreover, those who actively continue to receive benefits or conceal their self-employment could be liable for fault overpayments for the amount they improperly received if there is no mitigating factors for failing to disclose the self employment. Id. However, if the overpayment was not fault based, it may simply be recouped from future unemployment payments and not be required to payed back separately. 43 P.S. 874 (2010).

If someone is a self employed business person and their business fails, they would probably not be entitled to unemployment. Morelli v. Commonwealth, 434 A.2d 1332 (Pa. Commw. 1981).