PUA – Unemployment Question (Michigan)
I was a self-employed equities trader for several years; I traded stocks, bonds, options, etc, but when COVID plummeted the market in early 2020, my account was liquidated and I was no longer able to continue self-employment. I knew that I would not qualify for standard unemployment insurance, as the IRS has very particular rules regarding what defines a “day-trader.” I read the Michigan LEO notifications and was told to apply for standard UI and the system would determine what I would qualify for. Not surprising, I was denied regular UI, but was APPROVED for PUA benefits. Yay. Fast forward to Feb and I received a correspondence that I needed to provide “Proof of Self-Employment” documentation. I resubmitted the same1099s I submitted for “income verification” purposes, as that is all I have to “Prove” my self-employment.
My question is if this is something I need to be worried about? Is this the first step for the State claiming I was ineligible to receive PUA and I may need to repay all benefits received through 2020 PLUS a penalty? Is this something that the state can try to claim I committed “fraud” over? I always answered the questions truthfully, as I understood them, but I know ignorance of the law does not provide immunity from it.
Best regards!
Terry Says
Dial down your worry. All states are going back over PUA claims because of so much fraud. Some, especially Illinois, have sent letters demanding return of the money. BUT the Federal government made it clear that is not necessary, so most states will not be pursuing those claims. You answered honestly and didn’t commit fraud. You will probably be asked to sign a waiver, so the state can prove it reconsidered your claim and you can keep the money. But each state is different and this is truly a mess.
Don’t lose sleep over it. And if they ask for a hearing, remind them that the previous stimulus bill said states are not required to claw back their own mistakes!