How do you win an unemployment appeal in California?

Have some doubts about Unemployment benefits in California while having 1099 income?

• I have a big dilemma here in regards to unemployment benefits and 1099s. I hope to find the answer and be able to sleep. I was laid off from my engineering office (W2 employee) in October 2010 and I've been collecting unemployment benefits since December 2010. I've been doing some little engineering work on the side, and have been collecting 1099s since 2005 to bump my income. I've paid my taxes accordingly ever since. Now, I want to understand if I'm in big trouble or not. The little work I used to do on the side is nowhere near to what my paycheck was, or even the monthly income from Unemployment. Still, you could say I'm still having little engineering requests here and there. Will I get in trouble at the end of the year for receiving a 1099 then? I'm actively looking for a job, but don't understand why I shouldn't be able to collect my rightful unemployment benefits if my 1099 income is not enough or comparable to the unemployment benefit itself or my previous engineering income within my old company. Hypothetically, if I were to find a job before the end of the year and stop collecting unemployment because of that, would I get in trouble because of the 1099s? I appreciate any comments, please don't be harsh. It's been tough out here.

• Answer:

  You are not penalized for working. You are perversely reward for not being able to find work. The 1099 is not the issue. The issues are working and getting paid. If the work is part-time, and you properly report it, and you remain available to do other work, then EDD cannot take away more than 75% of what you make on the project; it is against the law. If you make $0-$25 in a week, they cannot take away any of your benefits; it is against the law for them to deduct even one penny. If you make $25-$100, then they take away $25 less than what you made (for example, if you made $65, then then would deduct $40). If you make $100-$600, then they take away 3/4 of what you made. You cannot lose the check completely unless you make at least $600 in a single week, or you fail to report it, or you work full time, or you are no longer available for other work. However, if you do not report the work (and the money you get paid) to EDD, then you are not allowed to claim any unemployment benefits for the week when you did the work. If you do, you may be sent to prison, but are more likely to be forced to pay money and/or to lose your future benefits, perhaps for as long as several years. There is a cap on what you can make without losing any unemployment benefits: $25 per week. You are not penalized. You get more total money, not less. If the project is $1000, and no more than $600 in any one week, and you properly report everything to EDD, then you get $1050 in unemployment plus $1000 for the project, which is a total of $2050. That is $250 more than if you did not take the project and just got the $1800 in unemployment. (Actually, you will spend roughly $250 more on taxes, so it is really just break-even, but it is definitely not a penalty.) On the other hand, if you do not report it to EDD, and they learn of it on their own, then you could lose well over $10,000, due to being denied future benefits for "fraud disqualification", plus whatever you pay a lawyer to try to keep you out of prison.