Confused about unemployment tax requirements - do I need to pay taxes on Washington ESD benefits?

Oh no, I didn't know this! How do I set up tax withholding on my weekly claims?

You can request withholding when you file your weekly claim on the Washington ESD website. Look for the tax withholding option - it's usually 10% federal.

20%? That seems like a lot. Is it really that much?

depends on your tax bracket but better safe than sorry. i owed like $800 one year because i didn't save anything

I've been trying to call Washington ESD for weeks about different issues but can never get through. Their phone lines are always busy.

Have you tried that Claimyr service? I used it last month when I couldn't reach anyone at Washington ESD. They basically call for you and connect you to an agent. Check out claimyr.com - they even have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works.

Never heard of that but I'm desperate to talk to someone. Does it actually work?

Yeah it worked for me. Took about 20 minutes and I was talking to an actual Washington ESD rep. Worth trying if you're stuck.

Those are two different things. Your employer pays unemployment insurance taxes to fund the system. You pay income tax on the benefits you receive, just like you would on wages.

Ok that makes more sense I guess. Still seems unfair though.

I don't think it's intentionally confusing, just that tax law is complicated in general.

Maybe but they could do a better job explaining this stuff upfront instead of people finding out later

Exactly right. The 1099-G will show your total benefits for the year. If you don't withhold, make sure to save at least 10-15% depending on your tax situation.

Thanks, this is really helpful. I'm going to try to set up withholding on my next weekly claim.

Yes, if you choose 10% federal withholding, they'll take 10% out of each payment and send it to the IRS on your behalf.

ok cool just wanted to make sure i understood that right

Yikes, $1200 is a lot! I definitely can't afford a surprise bill like that.

Yeah it was rough. Had to set up a payment plan with the IRS. Learn from my mistake!

Good point. I've been thinking about doing some freelance work but wasn't sure how that would affect my claim.

You have to report any work income when you file your weekly claim. Washington ESD will reduce your benefits based on how much you earned.

Perfect, I'll look for that when I file this week. Thanks everyone for all the help!

How much does something like that cost? Seems too good to be true.

It's not free but way cheaper than missing work to spend all day calling. The time savings alone made it worth it for me.

That's a good point. I usually get a small refund so this might actually work out ok.

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

oh right duh, forgot we don't have state income tax here. thanks!

Same here! Glad I asked about this now instead of being surprised later.

I'll look into that. I've been getting benefits for 8 weeks already without withholding.

Good advice. If you expect to owe more than $1000 when you file, quarterly payments can help avoid penalties.

Yeah that does make it simpler to understand once you know that basic fact.

Good tip. I should probably start tracking this better.

That's awesome! I'm definitely going to try it if I need to call about the tax withholding setup.

Glad it worked for you too! It's nice to have an option when the regular phone lines are jammed.

I'm single so that's not an issue for me, but good point for others to consider.

Agreed! This community is so helpful. I feel much better about handling this now.

Happy to help! Tax issues can be stressful but they're manageable once you understand the basics.