What happens if you don't withhold taxes on unemployment benefits in NY?

You can change your withholding election at any time through your online account. Log into your my.ny.gov portal, go to your unemployment services, and look for tax withholding options. NYS Department of Labor will withhold 10% for federal taxes if you elect it. You should also consider state taxes - NY unemployment is taxable income. The sooner you start withholding, the less you'll owe at tax time.

oh no i didnt know unemployment was taxable!! ive been getting benefits for 3 months and never thought about taxes. how much do people usually owe?

I made this same mistake last year and ended up owing $1,800 at tax time. It was brutal. I had to set up a payment plan with the IRS. Definitely start withholding now and try to save some money from your previous payments. The 10% federal withholding usually isn't enough to cover everything you'll owe.

I was in a similar situation where I couldn't get through to NYS Department of Labor to change my withholding settings. The phone lines were always busy and the online portal kept timing out. I ended up using this service called Claimyr (claimyr.com) that helped me get connected to an actual agent who walked me through changing my tax settings. They have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. Saved me a lot of frustration trying to navigate the system myself.

The tax thing with unemployment is such a mess. They should make it clearer upfront that this is taxable income. I bet half the people collecting don't realize until it's too late.

I went through this exact same thing last year and it was a wake-up call. The good news is you caught it at 8 weeks - I didn't realize until I had collected for 6 months! Here's what I learned: definitely turn on withholding ASAP like others mentioned, but also consider opening a separate savings account and putting away an extra 15-20% of each payment since the 10% federal withholding won't cover state taxes. I used a simple rule - for every $100 in benefits, I'd save $20 in a "tax fund." It made tax season much less painful. Also, keep all your 1099-G forms organized - you'll need them for filing. Don't panic though, you're addressing it early enough to avoid a major surprise!