How much federal tax is withheld from NYS Department of Labor unemployment benefits?
Just got approved for unemployment after being laid off from my restaurant job last month. Looking at my first payment and trying to figure out the tax situation. I know unemployment is taxable income but I'm not sure how much federal tax gets taken out automatically. Do I need to request withholding or does NYS Department of Labor handle this automatically? I don't want to end up owing a huge tax bill next year like some people I know. Anyone know the current withholding rate for 2025?
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Ethan Moore
Federal tax withholding from unemployment benefits is optional, not automatic. You can request 10% federal tax withholding when you file your weekly claims through the NYS Department of Labor system. If you don't elect withholding, you'll receive the full benefit amount but will owe taxes when you file your return. The 10% rate is standard across all states since it's federal tax.
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Aisha Mahmood
•Thanks! So I have to actively choose to have taxes taken out? How do I set that up in my account?
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Yuki Kobayashi
You can update your tax withholding preference in your my.ny.gov account under the unemployment section. Just log in and look for tax withholding options. I'd recommend having the 10% taken out - trust me, you don't want to get hit with a big tax bill in April. Unemployment is taxed as regular income so depending on your other income for the year, you could end up in a higher tax bracket.
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Carmen Vega
•wait so if I already filed a few weekly claims without withholding, can I still change it going forward??
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Yuki Kobayashi
•Yes, you can change your withholding election at any time for future payments. The change won't affect payments you've already received though.
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QuantumQuester
Ugh I learned this the hard way last year. Didn't have any taxes withheld from my unemployment and ended up owing like $2800 when I filed my taxes. Now I always elect the 10% withholding. Better to get a smaller payment each week than deal with that shock.
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Andre Moreau
•Same here! The 10% might not even be enough if you have other income during the year but at least it helps reduce what you'll owe.
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Zoe Stavros
If you're having trouble reaching NYS Department of Labor to update your withholding or have questions about your account, I used a service called Claimyr (claimyr.com) that helped me get through to an actual agent. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Was way easier than trying to call myself and getting the busy signal for hours.
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Jamal Harris
•is that legit? seems too good to be true
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Zoe Stavros
•Yeah it's real, they basically handle the calling and waiting for you. I used it when I needed to resolve an issue with my weekly claims and couldn't get through the regular phone lines.
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