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I own an SCorp. I lost my only contract vehicle which brought money into company. I received my last payment last week. However, I still need to provide myself with benefits (health, disability, etc) which are paid out of the company’s bank account. Since I no longer have any money coming in, I would like to get Virginia Unemployment to help pay some bills. I am thinking of two scenarios on how to deal with this. 1. Empty the Scorp bank account with a shareholder distribution. Pay my benefits with personal deposits. I think it would become COBRA, correct? Also, keep enough money in the business account to pay business expenses such as bank fees. 2. Keep all money in the business account with no shareholder distribution (about $10K). Pay my benefits (health, etc) with that money. Get unemployment. I think it is not COBRA in this case? I need to know what is the smartest, legal way to do get unemployment but also be an officer in an Scorp.
Yes, I paid VEC based on my salary as an employee for the past 9 1/2 yeas.
I have not taken any unemployment at this time; that is , I haven't received any weekly payments.
I did "apply" for unemployment and received an assessment. But, because I was still receiving final payments into the company, I decided not to apply and get payments on a weekly basis. In fact, I think it is expired (after 28 days) and if I want unemployment, will have to reapply.
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Okay, so I'm eligible. But, how do I handle paying the benefits? I came up with 2 scenarios.
1. Empty the Scorp bank account with a shareholder distribution. Pay my benefits with personal deposits. I think it would become COBRA, correct? Also, keep enough money in the business account to pay business expenses such as bank fees.
2. Keep all money in the business account with no shareholder distribution (about $10K). Pay my benefits (health, etc) with that money. Get unemployment. I think it is not COBRA in this case?
I find this so confusing..thanks for your patience.
So, it sounds like I should empty the business account where the benefits are being paid with a shareholder distribution. Then payback into he business account with personal funds so that the benefits are paid each month.
Does this sound reasonable?
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