How much is unemployment tax in California? EDD withholding explained

Wait so California actually doesn't tax unemployment?? That's a relief honestly. So if I opt for the 10% federal withholding it'll just come out of each weekly payment automatically?

Exactly right. If you request the withholding, EDD deducts 10% from every payment before depositing to your debit card or bank account. So if your weekly benefit amount is $400, you'd receive $360 and EDD holds $40 toward your federal tax obligation. It really does simplify things come tax time.

just want to add that the 1099-G mails out in late January usually so don't panic if you don't have it by january 1st lol

Yeah that's probably what I'll do. Better to have it handled than get a surprise bill in April when I'm hopefully back to work.

same thing happened to my cousin, owed close to $1000. just opt in for withholding its not worth the risk

Oh interesting, I might need this. I've been trying to call EDD to ask about changing my withholding preference and can't get through at all.

does it actually work? i've heard about these services before and been skeptical

I was skeptical too honestly. But yes it worked for me. Got connected to an actual EDD rep who updated my withholding election over the phone. Way easier than the online process for certain account changes.

This is a really good point. I did the 10% and still owed a little at the end because I had some freelance gigs while collecting UI. The 10% only covers the UI portion.

Oh good point. I do have some part-time work on the side that I've been reporting on my weekly certifications. So I should probably account for that when thinking about total tax liability.

Exactly. EDD's 10% withholding only applies to your UI benefits. Your part-time earnings are separate and if your employer isn't withholding enough on those, you could owe both from the UI side and the work income side. Better to run the numbers now than get a big April surprise.

wait hold on i thought if you work part time while on unemployment you dont get taxed the same?? someone told me there was some exemption

She's probably thinking of a COVID-era provision from 2020 where Congress temporarily excluded the first $10,200 of unemployment benefits from federal income tax. That was a one-time thing and hasn't been in effect since. Currently ALL unemployment benefits are fully taxable at the federal level regardless of the amount. No exclusion threshold exists in 2025.

yeah that tracks she always gets old info confused with current stuff lol thanks for clearing that up

This trips SO many people up. The 2020 exclusion gets repeated constantly even now and it just doesn't apply anymore. Full amount is taxable.

Take a breath! It's actually fixable. Log into your UI Online account, go to the 'Profile' section, and look for 'Tax Withholding.' You should be able to submit your DE 4S election there. If you can't find it or if the system is glitching, you can download the paper DE 4S form from EDD's website and mail it in. It usually takes about a week to process.

I tried the profile section and the tax withholding option just gives me an error. Going to try the paper form I guess. This system is so broken.

If the online method keeps erroring out and you need it changed fast, that's exactly when Claimyr is worth it. claimyr.com - got me through to EDD to handle account stuff when the online system was being glitchy. Also their video at https://youtu.be/JmuwXR7HA10 explains exactly how the callback process works.

Okay actually going to look into that because I've been trying to call EDD for two weeks and genuinely cannot get a human on the phone. Thanks.

This is super helpful to know in advance. I use TurboTax so hopefully it handles the California adjustment automatically.

Yes TurboTax handles it fine. When you enter the 1099-G it will ask you which state the benefits are from and it automatically applies the California exemption. You just need the total amount from box 1 and any federal taxes withheld from box 4.

good to know, i always dread the 1099-G part when filing

Oh that's a really good tip, I moved last month and need to double check my address is updated in the system.

yeah do it asap. you can also access your 1099-G electronically through UI Online under the 'Payment Activity' section i believe so even if the mail copy gets lost you can get it online

This is accurate and an underappreciated point. If your expected tax liability exceeds $1,000 for the year, the IRS expects either withholding or quarterly estimated payments. For extended UI claims the amount could definitely trigger this threshold. The underpayment penalty is relatively small but it's an annoyance.

Yeah my penalty was only like $45 but still. Just opt for the 10% withholding and you avoid the whole situation.

I had no idea quarterly payments were even a thing for unemployment. I assumed the 1099-G at year end was all you had to worry about

EDD automatically issues 1099-G forms to everyone who received benefits during the tax year. If you have paperless delivery set up in UI Online you'll get an email notification when it's available electronically, typically in late January. If not, a paper copy mails to your address on file. You don't have to request it - but you do want to make sure your address and notification preferences are current.

Oh okay good. I think I have paperless on so I'll watch for the email. Thanks.

if you set up paperless you should get both an email notification AND be able to download it from UI Online. the electronic version is available faster than the mailed one usually

EDD remits the withheld amount directly to the IRS on your behalf, similar to how an employer sends your paycheck withholding to the IRS. You don't have to do anything additional with that money. It shows up in box 4 of your 1099-G as 'Federal income tax withheld' and you claim it as a credit on your tax return just like W-2 withholding. The IRS already has it before you even file.

Ohhhh okay that makes way more sense. So it's literally the same as normal paycheck withholding just voluntary. Got it.

Same question I had! Good to know it actually goes to the IRS directly and isn't just sitting somewhere in limbo.

That is terrifying. Definitely going to verify on my payment history once I set it up. Thanks for that tip.

Yeah just check that your next payment shows a slightly lower amount than your WBA. If your WBA is $450 and you're supposed to have 10% withheld, your payment should be $405. If it's $450, the withholding didn't actually apply.

this is exactly the kind of thing EDD should be clearer about. a 'withholding enabled' status that doesn't actually work is just cruel when people are already stressed

Good to know. I do have some part time work so my payments vary week to week. Makes sense that the withholding would just be 10% of whatever they actually pay.

Correct. The withholding is percentage based not a flat dollar amount, so it scales with each payment automatically.

Totally reasonable to think about it that way. If you're collecting for a short period your total UI income might be low enough that the tax liability is minimal or even zero depending on your total annual income. If you're in a low tax bracket or have deductions, you might owe nothing on a few weeks of UI. But if you're expecting to be in a higher bracket due to your new job salary, even a few weeks of UI at a 22% or higher marginal rate could mean a few hundred dollars owed. Worth doing a quick estimate.

yeah my new job pays pretty well so I'll probably be in a higher bracket. maybe I'll just do the withholding to be safe even for a short time

Short claim or not, the withholding is just a click to set up. Not worth the mental overhead of calculating exact tax liability when 10% handles it automatically.

Really important clarification. California employers pay into the UI system through the FUTA federal rate plus the California SUI (State Unemployment Insurance) rate, which varies based on the employer's experience rating. Employees don't contribute to UI directly in California unlike SDI where employees do pay in. Good catch that the question could be interpreted two ways.

I'm definitely talking about the income tax side as someone receiving benefits. But good to know the distinction since I'd never thought about the employer-funded side of it.

wait so employees DON'T pay for unemployment? I always thought they took UI tax out of our paychecks like social security

That's reassuring to hear. I was worried about owing but there's actually a scenario where you over-withhold and get money back. Makes the 10% option feel lower risk.

Yeah if you end up with lower total annual income because of job loss, you might actually be in a lower bracket than normal which means the 10% withholding exceeds your actual rate. Bonus.

This happened to me too one year. The refund was small but it was a nice surprise. 10% withholding is basically the safe direction to err in.

good point, the 'worst case' of the 10% withholding is you get a slightly smaller refund or a small one. the worst case of no withholding is a surprise bill plus potential underpayment penalty

Same form - the DE 4S. You can use it to elect withholding or to revoke it. Just log into UI Online under your profile settings and update the withholding election, or submit a new DE 4S by mail indicating you want to terminate withholding. Changes take effect going forward and don't affect amounts already withheld.

Perfect, thank you. I'll log in and update it.

EXACTLY. I had to learn this from random forums instead of from EDD itself. The onboarding information is terrible.

Agreed the communication could definitely be better. EDD does include some language about taxes in the award notice they mail out but it's easy to overlook. Setting up withholding during initial claim filing would make much more sense from a user experience perspective.

I searched all through my award letter and found like one sentence about taxes. Not exactly prominent. Anyway at least threads like this exist so people can find the info.

Three days trying to reach EDD for one simple question is insane. The phone system is genuinely broken.

It really is. And the frustrating part is I wasn't calling about something complicated. Just needed to confirm my DE 4S change went through. You shouldn't need a service to ask a basic question but here we are.

Going to bookmark claimyr.com for if I run into phone issues. I've heard too many stories about people calling EDD for days and getting nowhere.

This is an amazing summary, thank you! Saving this whole thread. I went from completely confused about how much is unemployment tax going to affect me to feeling like I actually understand the whole picture.

Great summary. One small addition: if you believe your 1099-G has an error or shows income from fraudulent claims filed in your name (which has unfortunately become more common), you should contact EDD immediately to request a corrected 1099-G before filing your taxes.

Really important addition, thank you. EDD fraud with stolen identities has been a significant issue and some people have received 1099-Gs for benefits they never collected. If that happens, don't panic but do contact EDD right away.

The fraud/identity theft 1099-G issue is a whole other rabbit hole but yes definitely worth knowing about. Good thread overall, very helpful for people navigating this for the first time.