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Can I take a distribution or draw from my LLC partnership while on unemployment?

by Michael
(Los Angeles, CA USA)

I am a 50% owner/partner in an LLC, but was laid off from my fulltime job and am now collecting unemployment. Does an LLC distribution of profits cause a denial of unemployment?



Hi Michael,

I think this is a question you best ask of the EDD, CPA or a tax attorney because I see this as mostly a "tax question" and I do not profess to know much at all about tax issues.

What I do know about and think may effect your UI benefits would be that any money received from other "work" could effect benefits for the week in which the money is made and money received does not necessarily have to be from "covered employment" to reduce any benefits paid .. so I think it would be necessary for you to find out how CA views your work for the LLC .. since you are probably an officer.

"Coverage"

This is just a starting point to give you a direction when searching the CA Code

My first thought after reading your question, was to ask you if the EDD is aware you have an LLC. I would question whether, even as a corporate officer, owning 50 percent, you would be considered exempt from "covered" employment. If you were the controlling partner .. I wouldn't have this question.





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