Can you collect unemployment while trading?
- Thread starter IronFist
- Start date
The federal supremcy clause, which I assume you are refereing to does supercede all state laws relating to what is income when it comes to TAXS. That is not what he is talking about. He is talking about getting money, not paying money. He and you are talking about two diffrent sets of laws, one for taxs, one for unemployement compensation from the state. The definition does not have to be the same. Unless your a lawyer with knowledge in this area or someone else with particular knowledge in the OP's state, don't argue about stuff you really don't know about. I've practiced law for a few years and am willing to admit I don't know the answer. However, I did give solid advice on how he could find out. Don't try and supercede that. (LOL)
It doesn't matter. Income is determined by the IRS not the state. If you have earned income you cannot apply for unemployment in ANY STATE. Earned income is from a job. Day trading is a job if you devote more than 500 hours in a calendar year.
The same is true with rental property. Rental property is not earned income unless my job is in real estate. Otherwise as an idividual without a job I can have all kinds of money coming in from rental property and STILL COLLECT UNEMPLOYMENT LEGALLY.
edit: and for the record, the federal government helps all states with their payment of unemployment.
Oh, baloney, income is not determined by the IRS, and even the IRS doesn't know how to classify income from trading.
If the IRS classified trading as "earned income", then why is it that every year I file as a "securities trader" and pay no social security or self-employment tax?
It's because they do NOT consider trading income to be "earned income", and it has absolutely nothing to do with how many hours I've spent at it.
You need another example? Peruse the government's Social Security site. A person collecting social security is limited in the amount of money he can "earn". Over a certain limit, he's docked from his monthly check.
Ah....but what is not considered to be "earned income"?
You got it. Money earned from investments.
Again, the U.S. Government, in MANY cases, does not consider trading or investment income to be "earned" income.
You got it --- I had to laugh at some of the other posts stating it was earned income, especially the one stating 500 hours as the threshold. I too have paid no social security taxes or self employment taxes for 12 years while I've traded. For those still in the dark --- earned income is reflected on a W-2 in most cases from salaries, wages, bonuses, etc.
If I'm an engineer (accountant, teacher, whatever) and get laid off I can trade securities and collect unemployment for the time period the state I reside in allows. Only if I go back to work for an employer and begin again receiving a salary (wages) would I no longer be eligible for unemployment checks.