Are taxes withheld from unemployment benefits in Washington ESD?

Washington ESD gives you the option to have federal taxes withheld at 10% when you file your claim. If you didn't elect withholding, they won't take anything out automatically. You can change this by logging into your account and updating your tax withholding preference.

yeah unemployment is taxable income just like wages. if you dont have taxes withheld you'll owe when you file your return

I had the same confusion when I started my claim last month. The withholding is ONLY for federal taxes - Washington state doesn't have income tax so there's no state withholding option. You'll get a 1099-G form at the end of the year showing your total benefits received.

If you're having trouble reaching Washington ESD to change your withholding, I found this service called Claimyr that helps you get through to an actual agent. They have a website at claimyr.com and there's a demo video at https://youtu.be/7DieNd3C7zQ showing how it works. Saved me hours of busy signals when I needed to update my tax preferences.

IMPORTANT: If you elect 10% withholding, that might not be enough depending on your tax bracket. I had withholding but still owed money because my total income pushed me into a higher bracket.

i never do withholding, just save money each week for taxes. gives me more flexibility

Just to clarify - unemployment benefits are taxed as ordinary income at your regular tax rate. The 10% withholding is just an estimate. If you usually get a refund when you file taxes, you might want to skip withholding. If you usually owe money, definitely elect it.

Does anyone know if there are any tax credits or deductions related to being unemployed? Like can you deduct job search expenses?

The tax situation gets more complicated if you receive unemployment in multiple states or have other income sources. I had a part-time job while on partial unemployment and it was confusing to figure out the tax implications.

Whatever you decide about withholding, make sure to keep track of all your unemployment payments throughout the year. Don't rely on just the 1099-G form - keep your own records.

I wish Washington ESD made this clearer when you file your claim. The tax withholding question is kind of buried in the application process.

Update: I used Claimyr again today to reach Washington ESD about a different issue and they were able to confirm my tax withholding election. The agent said a lot of people call about this because it's confusing. Definitely recommend the service if you need to speak with someone directly.

For anyone who's self-employed or has 1099 income, unemployment taxes can get really complicated. You might want to set aside more than just the standard withholding rate.

The good news is that if you elect withholding and it turns out to be too much, you'll just get a bigger refund when you file your taxes. It's better to overwithhold than underwithhold.

I made the mistake of not electing withholding on my first unemployment claim years ago. Ended up owing like $2,000 in taxes. Learned my lesson!

Just remember that unemployment benefits count as income for the entire year, not just when you receive them. So if you get benefits early in the year but find a job later, you still need to account for that income on your tax return.

One more thing - if you move to a different state while receiving Washington unemployment, you might have to file tax returns in multiple states. Something to keep in mind if you're job searching in other areas.

Thanks everyone for all the info! This thread has been really helpful. I'm going to log into my Washington ESD account and elect the 10% withholding just to be safe.