How can I qualify for unemployment compensation if I'm using AdSense?

October 17, 2005 8:50 AM

I want to apply for unemployment benefits, but my website uses AdSense! What should I do?

I recently got laid off from my job. As I work as an animator, this is par for the course, and it may be awhile before I get another long-term gig, or even a freelance one. However, since earlier this year, I've been using Google AdSense on a video game fansite I run in my spare time. The site gets a fair amount of traffic, and whatever ad revenue is generated covers hosting and other site-related expenses (any excess revenue is designated for possible future emergencies, contest prizes, and/or charity).

When applying for unemployment benefits this morning, I ran into this question: ...do you have a business or are you engaged in any activity which brings in or may bring in income? In the "help" section, "engaged in any activity" is described as: You are ineligible for unemployment insurance on any day in which you perform any services in employment or self-employment regardless of whether you are paid for these services.

Given that I have the AdSense account, this is of some concern. I would be willing to turn off the ads temporarily (there's enough AdSense revenue accrued to cover a few months of hosting, so no worries there), if it would mean I could legally get unemployment benefits. However, I do not wish to close the AdSense account altogether. Does anyone have any advice on what I should do? If it helps, I live in New Jersey and am applying for benefits with New York State (having worked in NYC).

posted by May Kasahara to Work & Money (14 answers total)

Lie.
posted by angry modem at 8:52 AM on October 17, 2005

Have you been reporting the AdSense income to the IRS?
posted by smackfu at 8:56 AM on October 17, 2005

Best answer: transfer the site and/or adsense accout to a friend
posted by dorian at 9:02 AM on October 17, 2005

*n
posted by dorian at 9:03 AM on October 17, 2005

Run the website under a corporation. You wouldn't have to pay yourself. Ergo, no income. Everything stays in the company.
posted by blue_beetle at 9:24 AM on October 17, 2005

Do you do anything each day for the AdSense revenue? It seems to me it's more like a savings account or other investment. You did something to earn the money you put in savings, but now even though it's earning interest, it's not due to performing any services in employment or self-employment .

I suppose technically any day you work on your site you'd be ineligible for unemployment, but on days you don't, I don't think it should affect your eligibility.

Of course IANAL, so take this as worth what you paid for it.
posted by blm at 9:27 AM on October 17, 2005

Have you been reporting the AdSense income to the IRS?

Even if he hasn't been, Google has been - they require tax info when setting up an AdSense payee.
posted by mrbill at 9:52 AM on October 17, 2005

I live in Canada, so things might be different here. However, when I applied for employment insurance several years ago, the government was okay with my side business, so long as I declared all revenue earned so that they could deduct it from my benefits. My explanation was that it would be foolish to turn away money, especially when it lessened the burden on the government. I also emphasized that it was not my focus for work and that I was simply accepting the earnings, instead of turning away a right to earn a living.
posted by acoutu at 10:23 AM on October 17, 2005

How much does AdSense bring in? Benefits in New York reach $405/week, which you may not be reaching with your AdSense sales. You'd therefore be able to collect the difference. The unemployment office may allow you to collect while your secondary income source is operational, so long as it doesn't turn into a primary one.

To be completely above-the-table, you should file for unemployment (you are, after all, unemployed) and report net site revenue each time it pays out (I'm assuming monthly, if that's how AdSense works). You may dent your unemployment by a few bucks, but it'd be for that period only, and in the intervening weeks you'd remain eligible.
posted by werty at 10:45 AM on October 17, 2005

Let me get this straight. You're employing yourself for no pay, creating a name for the site, reinvesting profits in the site, performing a service by being on-call for site emergencies even if you do nothing else, and you want to collect meager unemployment from the state?

Me, I wouldn't suck at that teat.
posted by trevyn at 11:19 AM on October 17, 2005

You are ineligible for unemployment insurance on any day in which you perform any services in employment or self-employment regardless of whether you are paid for these services.

I think this is crystal clear. Unless you shut down the site entirely, you cannot apply and be above-the-table with this. Like I mentioned above, being on-call for emergencies, not to mention providing the hosting/bank/adserving accounts, are definitely services you are performing in self-employment.
posted by trevyn at 11:22 AM on October 17, 2005

Blue_Beetle is incorrect. Running the site under a corporation would actually make things worse. Unemployment takes a very sour view of applicants who have a corporation under their control -- those who do will often get rejected in the first instance and have to prove on appeal that the corporation is entirely defunct with no chance of revival.
posted by MattD at 12:54 PM on October 17, 2005

You could try contacting the Unemployment Action Center, a coalition of New York area law schools who help with contested unemployment cases. This sounds like an interesting issue that they might be willing to help you solve, although it's not yet in the stage where they normally get involved.
posted by footnote at 3:36 PM on October 17, 2005

When I was on unemployment, all I had to do was declare my freelance income. They allow you to do part-time work and temp work and still collect as long as you stay below a ceiling and deduct.
posted by dhartung at 6:26 PM on October 17, 2005