NYS Department of Labor question - what is federal unemployment tax and how does it affect my benefits?
I've been receiving unemployment benefits for about 6 weeks now and just noticed something called 'federal unemployment tax' mentioned in some paperwork. I'm confused about what this actually is and whether it impacts my weekly benefit amount or eligibility. Does the NYS Department of Labor deduct this from my payments? I've been getting $420 per week and want to make sure I understand all the taxes involved. Also wondering if this affects my job search requirements or anything else with my claim status.
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ElectricDreamer
Federal unemployment tax (FUTA) is actually paid by employers, not deducted from your benefits. It's what funds the unemployment insurance system. Your NYS Department of Labor benefits aren't reduced by FUTA - that's a separate employer tax. However, your unemployment benefits ARE subject to federal income tax, which is different. You can choose to have federal taxes withheld from your weekly payments when you file your weekly claim.
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Dmitry Smirnov
•Oh that makes more sense! So I don't need to worry about FUTA affecting my $420 weekly amount? Should I be having federal taxes withheld or just pay at tax time?
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Ava Johnson
yeah the federal unemployment tax thing confused me too when i first filed. like the other person said its paid by employers not us. but definitely consider having the 10% federal withholding taken out of your benefits. i didnt do it last year and owed like $800 at tax time which sucked
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Dmitry Smirnov
•Ugh that sounds awful! I definitely don't want a big tax bill. How do I set up the withholding through my NYS Department of Labor account?
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Miguel Diaz
You can set up federal tax withholding when you file your weekly claim on the NYS Department of Labor website. There's an option to withhold 10% for federal taxes. Just log into your my.ny.gov account and look for the tax withholding section when you're doing your weekly certification. It's much easier than dealing with a huge tax bill later.
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Zainab Ahmed
I had so much trouble getting through to NYS Department of Labor to ask about tax stuff like this. Spent hours calling and either got busy signals or got hung up on. Finally used this service called Claimyr (claimyr.com) that actually got me connected to a real person at NYS Department of Labor. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Way better than trying to call on your own.
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Dmitry Smirnov
•That's interesting, I hadn't heard of that service before. Did they charge you a lot for it?
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Zainab Ahmed
•It was worth it to finally talk to someone who could explain the tax withholding options properly. Much better than being stuck on hold forever.
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Connor Byrne
Wait I'm getting really confused now. Is federal unemployment tax the same as the taxes they take out of regular paychecks? And does this affect my job search log requirements at all? I've been doing my 3 job contacts per week but want to make sure I'm not missing anything important about taxes and my claim.
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ElectricDreamer
•No, federal unemployment tax (FUTA) is completely separate from payroll taxes. It has nothing to do with your job search requirements. Keep doing your 3 job contacts per week as required by NYS Department of Labor. The tax withholding is just about income taxes on your benefits, not about maintaining eligibility.
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Yara Abboud
thanks for asking this question! i was wondering the same thing but felt dumb asking lol
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