NYS Department of Labor unemployment tax calculator - how much taxes do you pay on benefits?
I've been collecting unemployment for about 8 weeks now and just realized I should probably figure out the tax situation before it gets out of hand. Does anyone know if there's a calculator somewhere to estimate how much taxes I'll owe on my NYS Department of Labor benefits? I'm getting $504 per week and have no idea what percentage gets taxed. Should I be setting aside money each week or can I just deal with it at tax time? Really don't want any surprises come April.
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Chloe Martin
Unemployment benefits are taxed as regular income at your normal tax rate. NYS Department of Labor doesn't automatically withhold federal taxes unless you request it, but you can have 10% withheld when you file your weekly claims. For state taxes, NY automatically withholds 2.5% I think. At $504/week that's about $50-60 per week in federal taxes depending on your bracket.
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Omar Farouk
•Wait so I can have them take out federal taxes automatically? How do I set that up through the NYS Department of Labor system?
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Diego Fernández
yeah you definitely want to set aside money if you're not having taxes withheld... learned this the hard way last year and owed like $2400 at tax time. you can change your withholding settings on the my.ny.gov portal when you do your weekly certification
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Anastasia Kuznetsov
There's no specific NYS Department of Labor tax calculator, but any regular income tax calculator will work since unemployment is taxed the same as wages. Just multiply your weekly benefit by 52 (or however many weeks you expect to collect) and plug that into a tax calculator along with any other income. Don't forget that if you're collecting unemployment for the full year, you'll also want to estimate quarterly payments to avoid penalties.
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Sean Fitzgerald
•This is good advice but calling NYS Department of Labor to change tax withholding is impossible right now. I've been trying for weeks to get through to someone about updating my withholding elections. Has anyone had luck reaching them lately? The wait times are insane and I keep getting disconnected.
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Zara Khan
•I had the same problem with reaching NYS Department of Labor agents until someone told me about Claimyr (claimyr.com). They basically get you connected to an actual person instead of waiting on hold forever. I used it last month to sort out my withholding issue and it actually worked. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me hours of frustration trying to get through on my own.
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MoonlightSonata
omg YES definitely set aside money!! i made this mistake and owed SO much money last april. unemployment is taxed just like regular income so if you normally have taxes taken out of your paycheck you need to do the same thing with UI benefits
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Mateo Gonzalez
Rule of thumb I use is to set aside 25% of each payment for taxes. That usually covers federal and state taxes plus a little cushion. Better to have too much saved than not enough when tax season rolls around. You can always adjust if you find out you're saving too much.
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Fatima Al-Qasimi
Thanks for all the helpful info everyone! I'm definitely going to set up automatic withholding to avoid a nasty surprise at tax time. For anyone else wondering about the math - at $504/week that's about $26,208 if you collect for a full year. Using a standard tax calculator and assuming you're single with no other major deductions, you're probably looking at around 12-22% federal tax rate plus NY state taxes. So Mateo's 25% rule seems pretty reasonable. Better safe than sorry!
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GalacticGuardian
•That's really helpful math, thanks for breaking it down! Just to add - if you're planning to collect unemployment for less than a full year, you can obviously adjust that calculation. Also worth noting that if you had taxes withheld from your regular job earlier in the year, that might reduce what you owe on the unemployment benefits. The IRS treats it all as one big income pool, so your total tax liability depends on your combined income from all sources. Definitely agree with the 25% rule though - I've been setting aside 30% just to be extra safe!
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Paloma Clark
Just wanted to share my experience - I've been collecting NYS unemployment for about 6 months now and initially didn't have any taxes withheld. Big mistake! When I finally did the math halfway through, I realized I was going to owe around $3,000 at tax time. I immediately called (well, tried to call) NYS Department of Labor to set up withholding but like others mentioned, getting through was nearly impossible. I ended up using that Claimyr service someone mentioned and was able to get my withholding set up within a few days. Now I have 10% federal and the 2.5% state automatically taken out. It's definitely worth the peace of mind, even if it means smaller weekly payments. Don't wait like I did - set it up from the beginning if you can!
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Megan D'Acosta
•Thanks for sharing your experience Paloma! This is exactly what I was worried about - owing thousands at tax time. I'm definitely going to try to set up withholding ASAP. Quick question though - when you say you have 10% federal withheld, is that 10% of your total benefit amount or 10% of what your estimated tax liability would be? I want to make sure I'm withholding enough but not too much. Also really appreciate the Claimyr recommendation - seems like that's the only way to actually reach someone at NYS Department of Labor these days!
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