Can You Receive Unemployment From Babysitting?

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If baby-sitting was your primary source of income and you've lost that work, your eligibility for unemployment benefits depends on whether the people who hired you paid unemployment taxes on your pay. That, in turn, depends on whether you qualified as a "household employee" under the definitions used by the Internal Revenue Service.

Workplace Test

If you were providing child-care services in your own home -- in other words, if people brought their children to you for you to watch -- you can assume that you were not a household employee and that those people didn't pay unemployment taxes, regardless of how much they paid you. You're considered self-employed, and self-employed people aren't eligible for benefits. If you regularly baby-sat in someone else's home, though, you may be a household employee.

Threshold Amount

Household employers are required to pay unemployment taxes for a baby-sitter who worked in their home and earned more than a certain amount in any calendar quarter. Calendar quarters are three-month segments of the year -- January through March, April through June, July through September, and October through December. As of 2011, the threshold amount was $1,000 for any quarter. If the total amount paid in a year exceeds $1,700, the household employer is also required to withhold Social Security and Medicare taxes. Household employers can't avoid their tax responsibilities by calling a baby-sitter an "independent contractor." The tax code defines household employees by the work they do, not what they're called.

Exceptions

If you are related to the person who paid you to baby-sit, you may not have been a household employee at all. The IRS instructs household employers not to pay unemployment taxes on wages paid to their spouses, their parents or any of their children under age 21.

Consideration

Even if you earned enough to qualify as a household employee and your employer paid the required taxes, you still might not qualify for unemployment benefits. The federal government sets the general guidelines for unemployment compensation programs, but each state has its own eligibility rules. Those rules usually require you to have earned a certain amount of money over a certain period before you became unemployed. If, for example, you earned $1,200 in one calendar quarter and nothing in the other three, your employer would have had to pay unemployment taxes on your wages, but, in most states, that wouldn't be enough to qualify you for benefits. Check your state's rules by following the link to state unemployment agencies at the CareerOneStop website.

Unpaid Taxes

It is possible your employer was supposed to have paid unemployment taxes on your baby-sitting wages but failed to do so, knowingly or unknowingly. In such a case, your wages will not have been reported to the state, and the state will deny your claim for benefits. You may have to file an appeal, which could lead to an investigation and possible legal action against the employer. Make sure you have evidence of your wages to support your claim for benefits.

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