Are you one of those who lost their job due to COVID-19 and other reasons? Then you’ve likely been taking advantage of the unemployment benefits. But you might be thinking of trying something else on the side to supplement the income. So, you might wonder, can you doordash while on unemployment in California?
It’s possible to do gig work like Doordash while on unemployment insurance. A person who loses their job and decides to doordash may be eligible if they meet all the conditions. However, they’ll have to disclose that information when filing unemployment claims to avoid unemployment insurance fraud.
Beyond California state unemployment benefits, there are also several federal government programs. However, many federal unemployment benefits were due to COVID-19, which has now ended. Here, we discuss whether you can doordash while on unemployment.
Unemployment Benefits in California
Unemployment benefits are one of the most crucial social security processes in place. Through it, those who lost their source of livelihood can receive benefits for their sustenance till they get new employment. The Employment Development Department (EDD) is responsible for administering the benefits in California. It’s possible to file claims through phone, mail, fax, or online.
Generally, California unemployment benefits are only available for a maximum of 26 weeks. A person can get between $40 to $450 per week, depending on the amount you made during your base period. The base period is the first 12 months of the last 18 months, and you must have made a minimum of $1,300 in your best earning quarter within the 12 months.
Although the formula for the benefits isn’t public, it’s usually the total wages in the best earning quarter divided by 26.
The benefits are available to people who meet the following conditions:
- You are partially or completely unemployed for reasons that are not your fault. A person is unemployed in a week when they didn’t perform any work for wages or worked part-time and earned 25% or $25 less than the unemployment benefit.
- You’re able and willing to start working and actively looking for work.
- Even those who quit can still get benefits if they quit for a good reason. However, in the case of those fired, the employer has to prove it was for misconduct.
What To Do If Your Claims Is Denied
Most times, the unemployment benefits help people get through the temporary hard times due to a job loss. So, it’s important to understand the eligibility criteria before applying. A claim can be rejected. If that happens, a person can appeal the decision using this form. The appeal has to be submitted in writing within 30 days, explaining why you think the claim should have been approved. The appeal process usually involves your former employer. Both of you will appear before an administrative law judge and present evidence. If it’s still denied, there’s another opportunity for appeal to the California Unemployment Insurance Appeals Board.
Can You Be a Gig Worker and Still Get Unemployment?
If you lose your job and decide to become a gig worker by working for Doordash, Uber, and the likes, it’s possible to get unemployment benefits. You have to meet all the conditions stipulated for eligibility. EDD requires submitting information every two weeks, so Unemployment benefits are available for those who are partially employed. In California, gig workers are eligible for unemployment benefits if they qualify.
The unemployment benefits depend on the gross income. So, if you lost your job and had to do with Doordash, you’ll still be able to get benefits as long as what you’re earning on doordash isn’t up to your actual income.
How to file Claims for Unemployment While Doing Doordash?
You’ll have to include information about your partial employment in your unemployment claims. Thus, your taxable earnings will be considered in determining what you’re entitled to as unemployment benefits. This will generally reduce how much you’ll get in benefits in California.
Failure to report your income from your side hustle will amount to unemployment insurance fraud and could result in paying back the benefits plus interest, ineligibility for future benefits, criminal prosecutions, and penalty fees,
Doordash will not deduct any taxes from your income so that the unemployment office may have no idea of your side hustle. But they may become aware at the end of the year. Even if they don’t, you should still make sure that you report it. If they find out, the money will amount to benefits overpayments, and you’ll have to repay it.
Form 1099 and Taxes
Although you can apply for unemployment benefits while working with Doordash, you’ll have to disclose all your annual earnings when filing your tax returns. You can do this using form 1099. The IRS Form 1099 is a record that your employer paid you money. When you make deliveries for Doordash, you’re working as an independent contractor. This means that the amount you get is gross income. So, you must pay your taxes at the end of the year. The form 1099 you get from Doordash allows you to do this easily.
The form contains the details of the money you earned while working for an employer within a year. The IRS will also receive a copy of the 1099 paperwork. So, when you’re filing your taxes, you must disclose the exact amount of your earnings. The 1099 form will also assist in keeping track of your earnings. But you should also try to record your earnings to present them as proof of income later. If DoorDash doesn’t give you a 1099 form, you should ask for one to be on the safe side.
The EDD will also issue you a form 1099G, which contains all the taxable income you received in unemployment benefits within the year.
Unemployment benefits aren’t only for the unemployed. It’s also for those who are partially employed. For instance, if you lose a job that pays you $1000 weekly and decides to work for Doordash, where you earn $600 weekly. You may be entitled to receive some unemployment benefits because you have lost income.