NYS Department of Labor unemployment - confused about federal unemployment withholdings on my benefits
I've been receiving unemployment benefits for about 6 weeks now and I'm totally confused about the tax situation. When I filed my initial claim with NYS Department of Labor, I think I opted to have federal taxes withheld but I'm not really sure what that means exactly. Are they taking out money from each weekly payment? How much are federal unemployment withholdings typically? I'm worried I'm going to owe a bunch at tax time if I didn't set this up right. Can someone explain how this works?
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Liam O'Connor
Yes, if you elected federal tax withholding when you filed your claim, NYS Department of Labor will automatically deduct 10% from each weekly benefit payment for federal income taxes. This gets sent directly to the IRS on your behalf. You can see the withholding amount on your payment history in your my.ny.gov account.
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CosmicCadet
•Oh wow 10%! That's more than I expected. So if my weekly benefit is $400, they're taking out $40 each week for federal taxes?
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Amara Adeyemi
Yeah I made the mistake of not electing withholding when I first filed last year and ended up owing like $1,200 in taxes. Unemployment is considered taxable income just like regular wages.
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Giovanni Gallo
You can change your withholding election at any time by calling NYS Department of Labor or updating it online. If you're not having taxes withheld currently, you might want to consider starting it or setting aside money yourself. The 10% federal withholding covers most people's tax liability on UI benefits, though everyone's situation is different.
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Fatima Al-Mazrouei
•How do you change it online? I've been looking through my my.ny.gov account but can't find where to update the tax withholding option.
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Giovanni Gallo
•Log into your account, go to 'Manage Benefits' and look for 'Tax Withholding Options.' If you can't find it there, you'll need to call the claims center. Fair warning though - getting through by phone can take forever with NYS Department of Labor.
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Dylan Wright
I had the same confusion! The federal unemployment withholdings thing threw me off too. What helped me was calling but obviously that's a nightmare with NYS Department of Labor phone lines. I actually used a service called Claimyr (claimyr.com) that helped me get through to an actual agent who explained everything about withholdings and updated my account. They have a demo video at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of calling and getting disconnected.
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CosmicCadet
•Never heard of that service before. Did they charge you a lot to help with the call?
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Dylan Wright
•They don't require any personal info upfront and the value was definitely worth it for me. Way better than spending my whole day redialing NYS Department of Labor and getting hung up on.
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NebulaKnight
Just remember you'll get a 1099-G form at the end of the year showing all the unemployment income you received, whether you had taxes withheld or not. Make sure you give that to your tax preparer or include it when you file your return.
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Amara Adeyemi
Also FYI there's no state tax withholding option in NY since unemployment benefits aren't subject to state income tax here. Only federal taxes apply to UI benefits.
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Mateo Martinez
Thanks everyone for the helpful info! I just checked my payment history and can confirm they are taking out exactly 10% each week like Liam mentioned. I was panicking for nothing - looks like I did set up the federal withholding correctly when I first applied. It's good to know that NY doesn't tax unemployment benefits at the state level either. That 1099-G reminder is really helpful too since I've never received unemployment before and wouldn't have known to look for that form.
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Sofia Ramirez
•That's great that you got it sorted out! I was in a similar boat when I first started collecting - the whole tax situation seemed so complicated but it's really not that bad once you understand it. The 10% federal withholding should cover most people's tax liability on UI benefits, though you might still owe a little bit depending on your other income for the year. At least you won't get hit with a huge surprise bill like some people do when they don't have any taxes withheld.
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