Are unemployment benefits considered earned income for Washington ESD claims?

Thanks! So when forms ask for earned income I should leave unemployment benefits off that section?

Exactly. Put UI benefits in the unearned income section if there is one, or just don't include them when they specifically ask for earned income only.

The distinction matters for tax purposes and certain benefits programs. Earned income gets different treatment for things like EITC, Social Security contributions, etc.

oh ok that makes sense i guess, taxes are so complicated

Good to know about the 1099-G form. Do they automatically send that or do I need to request it?

They send it automatically if you received benefits. Should come in January for the previous tax year.

You can also access it online through your Washington ESD account if you need it sooner or lose the paper copy.

For rental applications it's different - they usually want to know about ALL your income sources to verify you can pay rent. The earned vs unearned distinction is mainly for tax and government benefit purposes.

Ohhhh ok so for apartments I should still list it, just not on tax forms in the earned income section. Got it.

seriously! everything about unemployment is confusing enough without all these technical terms

The classifications exist for good reasons related to how different types of income are treated under various laws and programs, but I agree the terminology could be clearer.

That sounds helpful! Does it actually work for getting through faster?

Yeah it worked for me. Instead of calling over and over I just let their system handle it and got a callback when an agent was available.

Interesting, I might try that next time I need to talk to someone at Washington ESD.

Good point! I'm not working right now but that's definitely important to know for when I start working again.

Yes this is super important - you have to report any work income on your weekly claims or you could get an overpayment notice later.

The earned vs unearned income classification is federal tax law, so it's the same everywhere. But each state has its own unemployment system with different rules for how benefits work.

ok good to know, thanks

Oh wow, did that cause problems with your benefits?

Not really, just had to resubmit with the correct information. But it delayed processing by a few weeks.

How do you set up the tax withholding? Is that something you do when you first apply or can you change it later?

You can request it when you apply or change it later by contacting Washington ESD. I think you can also do it online through your account.

Correct, you don't earn Social Security credits from unemployment benefits since no FICA taxes are taken out. Only earned income from working generates SS credits.

makes sense, thanks for clarifying

That's a really good point that people might not think about when they're doing their taxes.

I didn't know about EITC requiring earned income specifically. Good thing to keep in mind.

Thanks for confirming that with an actual Washington ESD agent! That's really helpful.

Did Claimyr work well for getting through? I keep meaning to try it but wasn't sure if it was worth it.

Yeah it worked great, got a callback within like 30 minutes instead of trying to call all day. Definitely recommend it if you need to actually talk to someone.

Right, so the distinction mainly matters for tax purposes and specific programs, but it's still income that needs to be reported most places.

Exactly. Don't leave it off applications thinking it doesn't count - it's still money coming in that affects your eligibility for need-based programs.

Glad it helped! I feel like I understand it much better now too.

Happy to help clarify. It's definitely one of those things that seems simple but has important nuances.

Good reminder! Even small amounts of freelance work need to be reported or you could get in trouble for not disclosing income.

Thanks, that's definitely something I'll keep in mind if I pick up any side work while I'm job searching.

You're welcome! These classification questions come up a lot so it's good to have a clear discussion about it.

Agreed, this thread should help a lot of people who have the same question.

Good to hear another positive experience with it. Might be worth trying next time I need to contact them.

Seems like a lot of people have had good luck with that service. I'll definitely keep it in mind.

Yep, sounds like you did it correctly! UI benefits go on line 7 of Form 1040, not with wages and salaries.

perfect, thanks for confirming that!

Same here! I feel much more confident about handling these kinds of questions now.

That's great to hear. Understanding these basics can save you a lot of headaches with taxes and benefit applications.