Can I Look for a Job in Another State While on Unemployment?

Unemployment rules have changed significantly since the beginning of the 2020 COVID-19 pandemic. Thanks to the CARES Act and other federal and state stimulus provisions, unemployment benefits have increased, while the rules for who can receive them had loosened.

While you need to be actively looking for work while you’re receiving unemployment benefits, your job-search options aren’t limited to applying for positions at companies doing business in the state that’s paying your benefits.

Yes, you can look for a job out of state and still receive unemployment benefits. If you move out of your state to gain access to a better job, but you still want to receive unemployment benefits, you’ll have to re-file your paperwork.

Traveling while receiving unemployment insurance to look for work or take a short vacation might be cause for you to stop filing unemployment claims. Understanding the basic rules of unemployment benefits will help you make sure you get the most available to you, avoid getting hit with a large tax bill you weren’t expecting or request to re-pay some of the benefits you received.

Changes to Unemployment for Contractors

Up until the CARES Act was passed, gig workers or independent contractors were not eligible for unemployment insurance, in part because you did not pay unemployment insurance (as an employer does for employees), explains the Brookings Institute. Even if you had a large client who paid you $100,000 per year and terminated your contract after five years of working with them, you were not considered unemployed. You simply lost that client.

With the passing of the CARES Act and subsequent stimulus programs, gig workers and contractors became eligible not only for state unemployment programs, but for federal aid, such as Pandemic Unemployment Assistance payments. These federal unemployment assistance programs are in addition to the stimulus checks many people received.

To qualify for federal and state unemployment benefits, gig and contract workers must show that their earnings have been affected by the pandemic. This means you could still be working and receive unemployment benefits as long as your hours were cut back or you lost clients or had your hourly wages reduced because of the pandemic.

Unemployment Work-Search Requirement

One requirement for receiving unemployment benefits at the state level is that you actively look for a job while you’re unemployed. Historically, you would need to submit documentation each week you submitted an unemployment claim. This could include providing copies of emails you sent and received from potential employers or records of resumes you mailed.

Looking for work in a different state than the one in which you live and are receiving unemployment benefits from can count toward your work-search requirement.

Because of the pandemic, some states suspended the requirement that you provide documentation of your job search. You would still need to answer a series of questions each week as you submit your claim about your work status. These questions might include whether or not you were actively looking for work during the week, whether or not you received and/or turned down any job offers and whether or not you received any wages, even a small amount for part-time work.

What If You Move?

You might feel you have a better chance of landing a job if you can apply in-person, and that might require you to move to a different state while you try this. You can be traveling while receiving unemployment insurance.

If you are living in that state temporarily and your apartment or house is not your primary residence, you might not have to re-apply. If you move permanently to a new state, you will need to re-apply. Contact your state unemployment office to determine if you’ll need to re-apply.

If you decide to move long-term or permanently to another state, you will be able to transfer your unemployment claim from one state to another because all states are members of the Interstate Reciprocal Benefit Payment Plan. Even if your employer paid unemployment taxes in Indiana, and Indiana has been paying your unemployment benefits, if you move to Illinois, you can still get Illinois to start paying your benefits, according to

Traveling while receiving unemployment benefits might not be allowed, depending on your situation, according to the law firm of Johns, Flaherty & Collins. For example, if you go home for the holidays but continue to conduct a job search and apply for positions, you are probably covered.

Don’t think you can just skip making claims while you’re traveling or working part-time and then start them when you get back home. Unemployment claims are extended to you for specific dates, not just amounts. If you skip one or more weeks, you might lose those benefits permanently or have to re-apply, depending on your state’s regulations.

You must be able to accept and start a job if you are offered one while you are receiving unemployment benefits. If you take a month-long vacation out of the country or a two-week cruise, you might not qualify for unemployment benefits. Contact your state unemployment office to discuss your travel situation to make sure you do not get accused of unemployment fraud.

Don’t Forget About Taxes

Pandemic stimulus checks, such as the $1,200 and $600 checks issued by the government in 2020 and 2021, are not taxed as income. You keep all the money.

Unemployment benefits are considered income and you’ll need to pay federal and/or state income taxes on your payments, depending on what type of benefits you receive and whether or not you live in a state with a state income tax. You can collect the full, untaxed amount each week, but make sure you keep enough on hand to pay your taxes at the end of the year. If not, you might be able to put your taxes on a credit card.

To make things easier on yourself, reduce your paperwork and avoid problems at tax time, allow your state unemployment office to deduct taxes each week. You can do this by selecting the appropriate box at your state unemployment office website. If you’re not sure how to do this, contact the office for assistance. They will deduct taxes from your state benefits and federal Pandemic Unemployment Assistance payments.

Deducting Job Search Expenses

Tax deductions for job search expenses are no longer available from 2018 to 2025, due to the Tax Cuts and Jobs Act of 2017, as outlined at tax website eFile.