NYS Department of Labor unemployment tax rate changes - what is the federal unemployment tax rate for 2025?
I'm trying to understand the tax implications of my unemployment benefits and I keep seeing conflicting information online. Does anyone know what the federal unemployment tax rate for 2025 is? I received about $8,200 in NYS Department of Labor benefits last year and I'm trying to figure out how much I might owe in taxes. My tax preparer is asking about withholdings but I didn't have any federal taxes taken out of my weekly claims. Should I have been doing that? I'm really confused about how this all works.
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Annabel Kimball
The federal unemployment tax rate isn't something you pay as an individual - that's what employers pay into the system. What you're asking about is how your unemployment benefits are taxed on your personal return. All unemployment compensation from NYS Department of Labor is considered taxable income at the federal level. You'll receive a 1099-G form showing your total benefits received.
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PaulineW
•Oh wow, I had no idea there was a difference! So I don't pay the unemployment tax rate myself, but my benefits count as regular income?
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Chris Elmeda
Yeah you definitely should have had federal taxes withheld from your weekly claims. When you file your weekly certification with NYS Department of Labor, there's an option to have 10% federal tax withheld automatically. Without that, you're gonna owe taxes on the full amount. $8,200 could mean you owe around $800-1200 depending on your tax bracket.
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PaulineW
•Ugh this is exactly what I was afraid of. Is there any way to set up withholding now for future claims?
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Chris Elmeda
•If you're still filing weekly claims you can change your withholding election through the my.ny.gov portal. Go to your unemployment account and look for tax withholding options.
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Jean Claude
i made the same mistake last year! didnt realize unemployment was taxable and got hit with a huge bill at tax time. definitely set up withholding if youre still collecting
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Charity Cohan
I had issues getting through to NYS Department of Labor to change my withholding settings last year. Spent weeks calling and either got busy signals or hung up on. Finally used Claimyr (claimyr.com) to actually connect with an agent who helped me set it up properly. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Made the whole process so much easier than trying to navigate the phone system myself.
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Josef Tearle
•How much did that cost? I'm dealing with the same callback nightmare trying to get my withholding changed.
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Charity Cohan
•Worth every penny when you consider how much time I wasted calling. Plus the agent was able to answer other questions I had about my claim status while I had them on the line.
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Shelby Bauman
Just to clarify since there seems to be some confusion - the Federal Unemployment Tax Act (FUTA) rate that employers pay is 6.0% on the first $7,000 of wages, but they get credits that usually bring it down to 0.6%. That's completely separate from how your benefits are taxed when you receive them. Your UI benefits are taxed as ordinary income at whatever your regular federal tax rate is.
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Raj Gupta
Thanks everyone for the helpful explanations! I'm in a similar boat - received unemployment benefits last year and didn't realize I should have set up withholding. For anyone else reading this, I found that the NYS Department of Labor website has a tax withholding calculator that can help estimate how much you might owe. Also, if you can't afford to pay the full amount at once, the IRS does offer payment plans. Definitely learned my lesson for this year - already set up the 10% federal withholding on my current claims.
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