Do you pay unemployment taxes the same way as regular income tax in NY?
I'm really confused about how unemployment taxes work. I've been getting UI benefits for about 2 months now and I opted to have taxes withheld, but I'm not sure if this is the same as regular income tax or if there's something different I need to do when filing. The NYS Department of Labor website isn't super clear about this. Do I treat my unemployment payments just like regular wages when I file my taxes? And is the withholding amount usually enough or do people end up owing more?
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Ethan Anderson
Yes, unemployment benefits are taxable income at both federal and state levels. The withholding you chose should cover most of your tax liability, but it depends on your total income for the year. You'll receive a 1099-G form from NYS Department of Labor in January showing the total benefits paid and taxes withheld. This gets reported on your tax return just like a W-2 from an employer.
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Ava Kim
•Thanks! So the 1099-G is basically like getting a W-2 from the state? I was worried I'd have to calculate something special.
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Layla Mendes
i made the mistake of not having taxes taken out when i first started collecting and ended up owing like $1200 at tax time last year. definitely better to have them withhold it even if its not perfect
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Ava Kim
•Yikes! Yeah I'm glad I chose to have it withheld. Better safe than sorry with a big tax bill.
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Lucas Notre-Dame
The withholding rate for unemployment is usually 10% federal and I think around 4% for NY state, but this might not be enough if you have other income or if you're in a higher tax bracket. You can also make quarterly estimated payments if you think you'll owe more. I had to contact NYS Department of Labor customer service last year because my withholding seemed off - couldn't get through on the phone for weeks until I used claimyr.com. They have this video demo at https://youtu.be/qyftW-mnTNI that shows exactly how it works. Got through to an agent the same day and they helped me adjust my withholding rate.
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Aria Park
•Wait, there's a service that helps you get through to NYS Department of Labor? I've been trying to call them for two weeks about my withholding settings and keep getting disconnected.
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Lucas Notre-Dame
•Yeah exactly, that's why I tried it. You just put in your info and they call you back when they get an agent on the line. Way better than sitting on hold for hours.
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Noah Ali
Just remember you can change your withholding election at any time through your my.ny.gov account if you need to adjust it based on your situation.
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