What button to press for NY unemployment tax withholding - is 4 the right option?
I just got on the phone with NY unemployment to set up my weekly benefits and I'm confused about the tax withholding options. When the automated system says "press 4 for unemployment taxes" - is that what I should press if I want them to take out taxes from my benefits? I don't want to be stuck with a big tax bill next year, so I definitely want them to withhold taxes now. Just want to make sure pressing 4 is the right choice before I mess something up. Has anyone done this recently?
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Emma Thompson
Yes, pressing 4 is correct if you want taxes withheld from your unemployment benefits. When you select this option, the system will set up automatic withholding of 10% for federal taxes. New York State taxes aren't automatically withheld though - you'll need to handle those separately when you file your taxes next year or make estimated tax payments.
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Javier Mendoza
•Thank you! Just wanted to make sure before I selected the wrong thing. So they only withhold federal and not state? That's good to know, I'll put some money aside for state taxes then.
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Malik Davis
yea thats the right button. i pressed it last month when i filed. its better to pay now then later trust me
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Isabella Santos
•I disagree! It's actually better to NOT have taxes withheld if you need the full payment amount now. You can just save up and pay the taxes when you file your return. That's what I'm doing because I need every penny right now, and I'm setting aside 15% of each payment in a separate account for taxes later.
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StarStrider
I PRESSED THE WRONG BUTTON when setting mine up and had to call back 57 TIMES to get through to fix it!!!! The NY unemployment phone system is COMPLETELY BROKEN. I spent THREE DAYS trying to get through to a human. What a joke our tax dollars pay for!!!!
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Ravi Gupta
•I had the same problem but found this service called Claimyr that got me through to an agent in about 20 minutes instead of calling for days. They have this system that keeps calling for you and puts you at the front of the line. Saved me so much frustration. There's a video about how it works: https://youtu.be/Rdqa1gKtxuE or check claimyr.com - totally worth it for me rather than spending days trying to get through.
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Freya Pedersen
To clarify for everyone: Option 4 in the NY unemployment phone system is specifically for setting up or changing federal tax withholding. The system withholds 10% for federal taxes only. New York State does not offer automatic withholding for unemployment benefits, so you'll need to plan ahead for state taxes. If you didn't choose tax withholding when you first applied, you can change your preference at any time by calling or visiting your online account and updating your preferences under the 'Payment Options' section.
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Omar Hassan
•What happens if I didn't select this when I first applied three weeks ago? Will I owe taxes on those payments? Sorry if that's a dumb question, I've never had unemployment before and I'm worried about doing everything right.
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Freya Pedersen
•That's not a dumb question at all! Yes, you'll owe taxes on ALL unemployment benefits you receive, including those first few weeks. The withholding option only affects future payments starting from when you make the change. For any payments where taxes weren't withheld, you'll need to account for those when you file your taxes or through estimated tax payments.
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Ravi Gupta
When i was on unemployment in 2024 i had taxes withheld and it really helped come tax time. My cousin didnt do it and got hit with a big tax bill. The 10% they take out usually covers most of what you owe. Option 4 is definitely what you want.
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Javier Mendoza
•Thanks for sharing your experience! I'm definitely going to have them withhold taxes. I'd rather get a smaller payment now than be surprised later.
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Isabella Santos
One thing to keep in mind that nobody mentioned - if you're receiving a fairly low unemployment benefit amount and don't have other significant income this year, you might not owe any federal taxes on your unemployment benefits at all. It depends on your total annual income. Sometimes it's worth talking to a tax professional before deciding to withhold.
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Omar Hassan
•Wait really? I thought unemployment was always taxable? I'm so confused about all this tax stuff...
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Isabella Santos
•Unemployment benefits are taxable income, but whether you actually owe tax depends on your total income for the year. If your total income (including unemployment) falls below certain thresholds, you might not owe any tax. Standard deduction for a single filer in 2025 is projected to be around $13,850. So if your total income is under that, you likely won't owe federal taxes.
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Malik Davis
just make sure u get a confirmation after u press 4. sometimes the system hangs up for no reason lol
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Javier Mendoza
•Good tip! I'll make sure to wait for confirmation. Their phone system seems pretty glitchy from what everyone is saying.
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