Are unemployment benefits taxed - Washington ESD didn't withhold taxes from my UI payments

Thank you! I found the option in my account settings. Should I also set aside money for what I've already received?

Definitely set aside at least 20-25% of what you've already received to be safe, depending on your total income for the year.

Same here! Got hit with a big tax bill and penalties because I had no idea unemployment was taxable income.

Ugh, I wish Washington ESD made this more clear when you're filing your initial claim. It should be highlighted somewhere.

How much does that service cost? I've been trying to reach them for weeks about my tax withholding.

It's worth it for the time you save. Way better than spending hours on hold or getting hung up on repeatedly.

Unfortunately yes, unemployment insurance is taxable. You're thinking of benefits like SNAP or Medicaid which aren't taxable.

well this sucks. guess I need to start putting money aside now

You should definitely change your withholding ASAP. Don't make the same mistake I did!

I do some freelance work occasionally. Do I need to report that even if it's under the weekly earnings threshold?

Yes, you need to report ALL earnings to Washington ESD regardless of the amount. For taxes, you'll get a 1099 for the freelance work.

The system really should make tax withholding the default option instead of making people opt in.

Totally agree. It feels like they're setting people up to fail.

Washington has no state income tax, so you only need to worry about federal taxes on your UI benefits.

Oh right, forgot about that. At least that's one less thing to worry about!

That's smart. I'm going to start doing that with my remaining payments.

25% seems high but probably better safe than sorry

Good to know! Will they mail it or do I need to download it from my account?

They usually mail it but you can also access it online through your Washington ESD account.

I'm definitely going to try that service. I've wasted so many hours trying to get through to someone at Washington ESD.

Same here. Going to check out that demo video you mentioned.

How do I calculate what to pay quarterly? This is all so confusing.

The IRS has a Form 1040ES with worksheets to help calculate estimated payments. Or talk to a tax preparer.

Start setting aside money now from future payments. Every little bit helps.

We're all learning this together. At least we can help each other figure it out.

I didn't think about that. I do have some part-time work income too.

Yeah, with multiple income sources you might want to withhold 15-20% to be safer.

It's fixed at 10% for federal withholding through Washington ESD. If you need more withheld, you'll have to make separate estimated tax payments.

Thanks for clarifying that!

Right? I wish this information was easier to find when you're first applying.

The Washington ESD website could definitely be clearer about tax implications.

I'm sold. Tried calling Washington ESD 15 times yesterday and never got through.

Going to try them this week. Thanks for the recommendation!

That's reassuring to know. I was worried about what happens if I can't pay it all at once.

Good point. Better to file on time and set up a payment plan than to not file at all.

Oh wow, I hadn't thought about how this affects our joint filing. Thanks for mentioning that.

Yeah, it can push you into a higher tax bracket depending on your spouse's income too.

Same here! Thanks everyone for all the helpful advice.

Glad this discussion helped so many people. We all need to look out for each other navigating this system.