Do you pay social security tax on unemployment benefits in NY?
I just started collecting unemployment after being laid off from my warehouse job in December. Getting my first payments now and wondering about taxes. Do I need to pay social security tax on these NYS Department of Labor unemployment benefits? I know regular income tax applies but not sure about SS tax. Want to make sure I'm not missing something that will bite me later.
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Emma Anderson
No, unemployment benefits are not subject to Social Security or Medicare taxes (FICA). Only federal and state income taxes apply. You can have taxes withheld from your weekly benefits by selecting that option when you certify online, or you can pay quarterly estimated taxes instead.
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Javier Morales
•Thanks! That's a relief. I was worried I'd owe a huge chunk at tax time. Should I still have the 10% federal withholding taken out?
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Malik Thompson
yeah no SS tax but you definitely want to have something withheld or you'll get slammed come tax season. learned that the hard way my first time on unemployment
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Isabella Ferreira
Correct - unemployment compensation is exempt from FICA taxes under IRS regulations. However, it's fully taxable as ordinary income for federal and NY state purposes. If you're not having taxes withheld, consider making quarterly payments to avoid penalties.
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CosmicVoyager
•Wait so if I'm getting $405 per week, how much should I expect to owe in taxes? I haven't been withholding anything because I thought it was like workers comp or something.
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Isabella Ferreira
•That depends on your total annual income and tax bracket. At $405/week that's about $21,000 annually if you collect for a full year. You'd want to estimate based on your combined income from work plus unemployment.
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Ravi Kapoor
Had issues with getting through to NYS Department of Labor to change my withholding elections. Kept getting busy signals for weeks. Finally used this service called Claimyr (claimyr.com) that got me connected to an actual agent in like 20 minutes. They have a video demo showing how it works: https://youtu.be/qyftW-mnTNI. Totally worth it when you need to actually talk to someone about your account settings.
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Javier Morales
•Interesting, never heard of that. How much does it cost?
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Ravi Kapoor
•They focus on the value of actually reaching someone rather than getting stuck in phone loops. Way better than spending hours trying to get through on your own.
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Freya Nielsen
The NYS Department of Labor system is so confusing about this stuff. Why can't they just explain it clearly on the website instead of making us guess about taxes??
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Omar Mahmoud
Just to confirm what others said - no Social Security tax on UI benefits. But definitely consider withholding because unemployment income can push you into a higher bracket when combined with your regular job income from earlier in the year.
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LordCommander
I went through this same situation last year when I was laid off from my retail job. Emma and Isabella are absolutely right - no FICA taxes on unemployment benefits, but they're fully taxable as regular income. I'd strongly recommend having the 10% federal withholding taken out when you certify each week. Even though it reduces your weekly payment, it saves you from a big tax bill later. You can change your withholding election anytime through the NY DOL website or by calling them. Trust me, it's worth the smaller weekly payments to avoid scrambling for tax money in April.
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